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Bureau of Mines Information Circular/1986 



Primary Silver Availability— 
Market Economy Countries 

A Minerals Availability Appraisal 

By E. H. Boyle, Jr., G. R. Peterson, and P. R. Thomas 




UNITED STATES DEPARTMENT OF THE INTERIOR 



Information Circular 9090 



Primary Silver Availability— 
Market Economy Countries 

A Minerals Availability Appraisal 

By E. H. Boyle, Jr., G. R. Peterson, and P. R. Thomas 




UNITED STATES DEPARTMENT OF THE INTERIOR 
Donald Paul Model, Secretary 

BUREAU OF MINES 
Robert C. Morton, Director 



As the Nation's principal conservation agency, the Department of the Interior has 
responsibility for most of our nationally owned public lands and natural resources. This 
includes fostering the wisest use of our land and water resources, protecting our fish 
and wildlife, preserving the environment and cultural values of our national parks and 
historical places, and providing for the enjoyment of life through outdoor recreation. 
The Department assesses our energy and mineral resources and works to assure that 
their development is in the best interests of all our people. The Department also has 
a major responsibility for American Indian reservation communities and for people who 
live in island territories under U.S. administration. 



.114 

no. ^0^0 




Library of Congress Cataloging in Publication Data 



Boyle, Edward H. 

Primary silver availability— market economy countries. 



(Bureau of Mines information circular ; 9090) 

Bibliography: p. 36 

Supt. of Docs, no.: I 28.27: 9090. 

1. Silver industry. 2. Silver mines and mining. I. Peterson, Gary R., 1948- 
n. Thomas, Paul R. III. Title. IV. Series: Information circular (United States. Bureau 
of Mines) ; 9090. 

-TN295.U4 [HD9536.A2] 622 s [338.27421] 86-600095 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, DC 20402 



HI 



PREFACE 



The Bureau of Mines is assessing the worldwide availability of selected minerals 
of economic significance, most of which are also critical minerals. The Bureau iden- 
tifies, collects, compiles, and evaluates information on producing, developing, and ex- 
plored deposits, and mineral processing plants worldwide. Objectives are to classify both 
domestic and foreign resources, to identify by cost evaluation those demonstrated 
resources that are reserves, and to prepare analyses of mineral availability. 

This report is one of a continuing series of reports that analyze the availability of 
minerals from domestic and foreign sources. Questions about, or comments on, these 
reports should be addressed to Chief, Division of Minerals Availability, Bureau of Mines, 
2401 E St., NW., Washington, DC 20241. 



CONTENTS 



Page 

Preface iii 

Abstract 1 

Introduction 2 

Historical perspective of the U.S. silver industry . 4 

The demonetization of silver 4 

Silver prices, 1968-84 5 

MEC new mine production and consumption, 

1968-83 6 

Silver mine production and type of occurrence .... 6 
Demonstrated resources of silver in market 

economy countries 8 

Predominantly silver deposits 10 

United States 10 

Other market economy countries 11 

Predominantly zinc deposits 11 

Predominantly lead deposits 12 

Predominantly copper deposits 12 

Predominantly gold deposits 13 

Operating costs and operational characteristics for 

predominantly silver properties 13 

U.S. producers 13 

Undeveloped U.S. deposits 14 

Producers in Mexico and Peru 15 



Other market economy countries 16 

Producers 16 

Nonproducers 16 

Availability from predominantly silver properties . 16 

Effect of exchange rate variations 18 

Availability of byproduct and coproduct silver .... 21 

Predominantly zinc 21 

Predominantly lead 21 

Predominantly copper 21 

Predominantly gold 23 

Summary 23 

Summary and conclusions 26 

Demonstrated silver resources 26 

Availability analyses 26 

Predominantly silver mines and deposits .... 26 
Byproduct and coproduct silver mines and 

deposits 27 

References 27 

Appendix A.— Centrally planned economy 

countries 28 

Appendix B.— Evaluated properties listed by 

primary commodity 30 



ILLUSTRATIONS 

1. Mineral resource classification categories 2 

2. Minerals Availability program deposit evaluation procedure 3 

3. Silver price history, 1960-84 5 

4. Relative 1983 silver production shares, by country and country grouping 7 

5. Distribution of total primary silver available from 14 U.S. and 39 foreign predominantly silver producers 10 

6. Comparison of long-run total costs and available silver from 14 U.S. and 39 foreign predominantly silver 

producers 17 

7. Index of exchange rates: United States, Canada, Mexico, and Peru 19 

8. Long-run total cost and available silver from 39 foreign predominantly silver producers, 1982 versus 

1984 20 

9. Potential annual silver production from 39 foreign predominantly silver producers at selected constant- 

dollar cost-price levels, 1982 versus 1984 20 

Total recoverable silver from mines and deposits in market economy countries— 

10. Zinc mines and deposits 22 

11. Lead mines and deposits 22 

12. Copper mines and deposits 23 

13. Gold mines and deposits 24 

14. Distribution of recoverable silver, by country, as of January 1984 25 

TABLES 



1. Consumption and mine production of silver in market economy countries for the years 1952, 1965, 1975, 

and 1983 6 

2. Mine production of silver in 1971, 1981, 1983, and 1984 for the six largest producing countries 7 

3. Contained silver from the demonstrated resources of 436 deposits in market economy countries as of 

January 1984, by status 9 

4. Recoverable silver from the demonstrated resources of 436 deposits in market economy countries as of 

January 1984, by predominant commodity 9 

5. Demonstrated resource data for 66 predominantly silver properties, by status and recoverable silver 

grade in ore 10 

6. Summary of demonstrated resource and recovery data for predominantly silver properties in MEC's, by 

status and country 10 

7. Estimated mine and mill operating costs for the 10 U.S. predominantly silver mines opened since 1969 . . 14 



VI 



Page 

8. Comparison of annual ore capacities between predominantly silver mines in Mexico and Peru, based on 

January 1984 data ; 15 

9. Long-term breakeven total cost estimates, predominantly silver producers, as of January 1984, by 

country 17 

Percentage distribution, by cost or price range, of total available silver— 

10. From U.S. and foreign predominantly silver producers, as of 1984 18 

11. From foreign predominantly silver producers, for 1982 and 1984 18 

12. Annual ore tonnage and annual silver capacities, by deposit type and status, for mines and deposits in 

market economy countries 24 

13. Summary of total recoverable demonstrated silver resources, by deposit classification 26 

A-1. Mine production of silver in centrally planned economy countries, 1972 and 1983 28 

A-2. Production of copper, lead, nickel, silver, and zinc in the Soviet Union for selected years 28 

A-3. Production of copper, lead, silver, and zinc in Poland, 1962, 1972, and 1983 28 

B-1. Properties evaluated as predominantly silver operations 30 

B-2. Properties evaluated as predominantly zinc operations 31 

B-3. Properties evaluated as predominantly lead operations 33 

B-4. Properties evaluated as predominantly copper operations 33 

B-5. Properties evaluated as predominantly gold operations 35 



UNIT OF MEASURE ABBREVIATIONS USED IN THIS REPORT 



$/tr oz 



dollars per troy ounce 



$/lb 


dollars per pound 


$/mt 


dollars per metric ton 


g 


gram* 


g/mt 


gram per metric ton'^ 


m 


meter 


mt 


metric ton' 



mt/d 


metric ton per day 


mt/yr 


metric ton per yeeir 


pet 


percent 


pct/yr 


percent per year 


tr oz 


troy ounce"* 


tr oz/yr 


troy ounce per year 


yr 


year 



^1 g = 0.032150737 tr oz. 

n g/mt = 1 ppm = 0.029 tr oz/st. 

n mt (2,204.8 lb) = 1 million g = 32,150 tr oz. 

n tr oz = 31.1035 g. 



PRIMARY SILVER AVAILABILITY— MARKET ECONOMY COUNTRIES 

A Minerals Availability Appraisal 

By E. H. Boyle Jr.,^ G. R. Peterson,^ and P. R. Thomas^ 

ABSTRACT 

The Bureau of Mines has evaluated the potential availability of silver from 436 mines 
and deposits in 41 market economy countries (MEC's) comprising five major economic 
categories of deposits: predominantly silver deposits and predominantly zinc, lead, cop- 
per, and gold deposits. This study evaluated the long-term cost and availability of 
primary silver production from 53 producing and 13 nonproducing predominantly silver 
properties in 11 MEC's and estimated the total recoverable silver from 370 properties 
as a coproduct or byproduct of zinc, lead, copper, or gold production. 

This study resulted in estimates of a demonstrated resource of 5.99 billion tr oz of 
recoverable silver as of January 1984. Of this total, 23.5 pet is in the 66 mines and 
deposits classified as predominantly silver properties. The largest quantity of recoverable 
silver, 43.9 pet, lies in the 121 properties classified as predominantly zinc, with 26.5 
pet in 120 properties classified as predominantly copper, 4.1 pet in 21 predominantly 
lead properties, and 2.0 pet in 108 predominantly gold properties. 

At current silver prices, the economics of silver production favor silver that is a 
byproduct or coproduct of zinc, lead, copper, or gold, and much of the silver production 
in the United States from the predominantly silver mines is at an economic disadvan- 
tage in comparison with silver production in other countries. 

'Geologist. 

'Mineral economist. 

•Economist. 

Minerals Availability Field Office, Bureau of Mines, Denver, CO. 



INTRODUCTION 



Silver is a metal critical to the production of many 
manufactured products owing to its high electrical conduc- 
tivity, resistance to oxidation, and strength over a wide 
range of temperatures. In addition, the light-sensitive prop- 
erties of some silver compounds are essential to the 
manufactvire of photographic film, while other silver com- 
pounds find important uses in medicine. Silver is also a 
precious metal which, like gold, is hoarded as a hedge 
against inflation. 

This Bureau of Mines study addresses the potential 
availability of primary silver from 436 mines and deposits 
in 41 market economy countries (MEC's)* comprising five 
major economic categories of deposits: (1) predominantly 
silver deposits, (2) predominantly zinc deposits, (3) 
predominantly lead deposits, (4) predominantly copper 
deposits, and (5) predominantly gold deposits. This study 
represents the compilation and inclusion of all silver data 
from prior availability studies done by the Bureau as well 
as analysis of 66 mines and deposits that are classified as 
predominantly silver deposits, 44 of which were not included 
in prior studies. In chronological order, the prior related 
availability studies are as follows: 

Copper Availability— Domestic 

Copper Availability— Market 
Economy Countries 

Lead and Zinc Availability- 
Domestic 



IC 8809, 1979 
IC 8930, 1983 

IC 8962, 1983 



'Market economy countries are defined as all countries that are not con- 
sidered as centrally planned economy countries (CPEC's). The CPEC's are 
Albania, Bulgairia, China, Cuba, Czechoslovakia, the German Democratic 
Republic, Hungary, Kampuchea, Laos, Mongolia, the Republic of North 
Korea, Poland, Romania, the U.S.S.R., and Vietnam. These countries are 
not evaluated in this study, owing to a lack of detailed data and because 
a market-oriented cost evaluation is not meaningful at present. 



Primary Lead and Zinc Availability— IC 9026, 1985 

Market Economy Countries 
Gold Availability— Market Economy IC 9070, 1986 

Countries 

Resource tonnage estimates for all of the properties in- 
cluded in this report were made at the demonstrated 
resource level according to the mineral resoxu-ce classifica- 
tion system (fig. 1) developed jointly by the Bureau and the 
U.S. Geological Survey (USGS) (i).» 

Any definition of a predominantly silver deposit 
employed for the purpose of long-run economic analysis is 
subject to some ambiguity and exception. The 66 
predominantly silver deposits evaluated for this study are 
defined as those deposits containing less than 3.5 pet com- 
bined payable lead and zinc in association with recoverable 
silver. This offers but one option for determining the relative 
importance of silver versus other recovered commodities for 
the purpose of long-run economic cost comparisons between 
primary silver operations and between silver-producing 
countries. 

The 66 predominantly silver mines and deposits were 
evaluated using the discounted-cash-flow rate of return 
(DCFROR) method. Analyses were performed to determine 
the long-run total cost (or per troy ounce revenue require- 
ment) of primary silver production for each property over 
its productive life (as determined by the current estimate 
of demonstrated resources), given a set of market prices for 
coproduct or byproduct lead, zinc, and other recovered com- 
modities. The long-run total cost estimates were determined 
at the breakeven (0-pct) rate-of-retum level. The breakeven 
rate-of-return level represents the point where total reve- 



'Italic numbers in parentheses refer to items in the list of references 
preceding the appendixes at the end of this report. 



Cumulative 
production 



IDENTIFIED RESOURCES 



Demonstrated 



Measured 



Indicated 



Inferred 



ECONOMIC 



MARGINALLY 
ECONOMIC 



SUBECONOMIC 



R«*0rv« 



b«s« 



Infarrad 

r«Mrv« 

bas* 



UNDISCOVERED RESOURCES 



Probability range 
(or) 



Hypothetical 



Speculative 



+ 
+ 



Other 
occurrences 



Includes nonconventional and low-grade materials 



Figure 1 . — Mineral resource classification categories. 



nues are just sufficient to cover total costs over the life of 
the operation. 

Of the 66 mines and deposits evaluated as predomi- 
nantly silver operations, 20 were originally included in IC 
9026 for the study of primary lead and zinc availability in 
MEC's, and 2 were originally included in IC 8930 for the 
study of copper availability in MEC's. Of the remaining 
domestic predominantly silver deposits, 12 were evaluated 
under contract by Morrison Knudsen and 5 by the Bureau; 
the other 27 foreign deposits were evaluated under contract 
by Davy McKee Corp. 

To determine potential recoverable silver as a byproduct 
or coproduct of other commodities, estimates of recoverable 
silver also included 132 deposits evaluated for lead and zinc 
in IC 9026 plus 10 additional deposits. Similarly, byproduct 
silver from copper deposits represents recoverable silver 
from 120 copper deposits evaluated for IC 8930, and by- 
product silver from gold deposits represents recoverable 
silver from 108 deposits evaluated as gold properties for IC 
9070. 

The flow of the Bureau's Minerals Availability program 
(MAP) evaluation process from deposit identification to 
development of availability information is illustrated in 
figure 2. This flow chart demonstrates the various evalua- 
tion stages required to estimate the potential availability 
of silver resources from demonstrated resources. 



Because revenues from silver in a byproduct or coprod- 
uct operation show a wide variation in terms of its percent- 
age contribution to total revenues (e.g., from less than 5 
pet to greater than 50 pet, depending upon prices of different 
commodities), it is meaningless to make detailed country- 
by-country comparisons of the economics of these operations 
unless it involves a total revenue comparison rather than 
a silver price determination comparison. However, a total 
revenue analysis of all 436 mines and deposits is, at pres- 
ent, beyond the scope of this study. Thus, in the price deter- 
mination analyses of this study, the only comparison con- 
sidered relevant is among silver price requirements at the 
predominantly silver mines and deposits, since only in these 
cases is the percentage contribution of silver revenues of 
prime importance to the overall economics. 

The purpose of this report is twofold: first, to estimate 
the total potential availability of silver from MEC's, then 
to evaluate the relative economics of the available silver 
in the predominantly silver properties of the United States 
and selected foreign countries. Toward that end, this study 
presents the amount of recoverable silver potentially avail- 
able as a byproduct or coproduct of zinc, lead, copper, and 
gold mines and deposits along with the availability and 
economic analyses of recoverable silver from 53 producing 
mines and 13 undeveloped deposits classified as predomi- 
nantly silver properties in 11 MEC's. 



Identification 

and 

selection 

of deposits 



Tonnage 

and 

grade 

determination 



Engineering 

and 

cost 

evaluation 



Deposit 

report 

preparation 



Mineral 
Industnes 
Location 
System 
(MILS) 
data 



MAP 

computer 

data 

base 



MAP 

permanent 

deposit 

files 



Taxes, 
royalties, 

cost 

indexes, 

prices, etc 



Data 
selection 

and 
validation 



Vanable 

and 

parameter 

adjustments 



Economic 
analysis 



Data 



Availability 
curves 



Analytical 
reports 



Sensitivity 
analysis 



u 



Data 



Availability 
curves 



Analytical 
reports 






Figure 2.— Minerals Availability program deposit evaluation procedure. 



HISTORICAL PERSPECTIVE OF THE U.S. SILVER INDUSTRY 



Significant mine production of silver in the United 
States began about 125 yr ago, with discovery in 1859 of 
the Comstock Lode in western Nevada by prospectors mov- 
ing inland from the "Mother Lode" gold region in Califor- 
nia. The Comstock Lode discovery was followed quickly by 
discoveries of silver deposits in other Western States, most 
particularly Colorado. As a result, total annual U.S. silver 
production rose from virtually zero in 1860 to about 25 to 
30 million tr oz by the mid-1870's. 

In 1878, Congress passed the Bland-Allison Act, which 
required the U.S. Treasury to purchase $2 million worth 
of silver every month to be used in minting coinage and to 
act as backing for silver certificates. At a silver price of 
$1.20/tr oz, this law required the purchase of about 20 
million tr oz/yr, or about 60 pet of total U.S. production at 
the time. As a result of this Act, annual U.S. silver produc- 
tion increased from 34 million tr oz in 1878 to 54 million 
tr oz by 1890. 

In 1890, the Sherman Purchase Act was enacted, requir- 
ing the U.S. Treasury to purchase 4.5 million tr oz of silver 
bullion every month. This purchase requirement of 54 
million tr oz/yr equaled nearly 100 pet of total U.S. silver 
production in 1890. As a result of this Act, annual U.S. 
silver production climbed to 63 million tr oz by 1893. The 
Sherman Purchase Act was repealed in 1893, however, and 
production declined to about 50 million tr oz by 1895. 

During the period 1895 to 1910, U.S. silver production 
was exceptionally stable, with annual output levels rang- 
ing between 50 to 54 million tr oz. Byproduct silver pro- 
duction from porphyry copper mines began during this 
period. 

From 1910 to 1916 there was a sharp increase in an- 
nual production, which rose to 78 million tr oz in 1916. The 
main reason was the increased demand for coinage by the 
allied countries during World War I; some effects were prob- 
ably also due to increased byproduct silver production from 
porphyry copper deposits. With the end of World War I, 
silver production decreased to 47 million tr oz in 1921. 

U.S. silver production rebounded from 1922 through 



1929, with production ranging from 59 to 70 million tr oz/yr. 
However, the silver price per troy ounce declined during 
this period from about $1.00 in 1922 to $0.50 in 1929. With 
the onset of the Great Depression, total U.S. silver produc- 
tion declined precipitously from close to 60 million tr oz for 
1929 to only 23 million tr oz in 1932, when the price of silver 
reached a low of $0.25. 

With the price of silver at this very low level of $0.25 
to $0.50, Congress passed the Silver Purchase Act of 1934, 
which directed the Secretary of the Treasury to purchase 
domestic and foreign silver until the iponetary value of the 
Treasury's silver stock reached 33 pet of the monetary value 
of its gold stock. This spiu"red a production increase from 
25 million tr oz in 1933 to 70 million tr oz in 1936. All told, 
for the years 1934-41, U.S. new mine silver production to- 
taled about 470 million tr oz, or an average of nearly 59 
million tr oz/yr. 

During World War II, total annual production declined 
dramatically from 66 million tr oz in 1941 to only 24 million 
tr oz in 1946. By 1948, production rose again, to a level of 
37 million tr oz. Over the 35-yr period 1949-83, U.S. mine 
production ranged from 30 to 44 million tr oz/jt, averag- 
ing 37 million tr oz/yr. During this most recent period, silver 
production as a byproduct from base metal ores of copper, 
lead, and zinc has ranged from 10 to 30 million tr oz/yr, 
while production from precious-metals ores (predominantly 
silver and predominantly gold ores) has ranged from 10 to 
30 million tr oz/yr. This 35-yr period represents the longest 
period of relatively stable silver production since 1860. 

In summary, from 1860 through 1983, cumulative U.S. 
new mine silver production is estimated to have totaled 
about 5.3 billion tr oz, with production of about 3.3 billion 
tr oz from 1860 through 1932 and 2.0 billion tr oz from 1933 
through 1983. The former period essentially represents 
silver production dominated by the near-surface, so-called 
"bonanza" deposits, while the latter period reflects the 
dominance of byproduct silver production from base-metal 
deposits and production from the underground pre- 
dominantly silver mines of Idaho. 



THE DEMONETIZATION OF SILVER 



On June 4, 1963, the enactment of Public Law 88-36 
repealed the Silver Act of 1934 and subsequent Acts of 1939 
and 1946, thus freeing silver from restrictive legislation (2, 
p. 1014). One result of passage of Public Law 88-36 was the 
resumption of trading of silver futures on the New York 
Commodity Exchange on June 12, 1963, the first such 
trading since August 1934 (2, p. 1014). 

During 1964, withdrawal of silver bullion from the 
Treasury stocks (both bullion securing silver certificates and 
free silver bullion) intensified so that as of yearend 1964 
only 1.2 billion tr oz of bullion was held by the U.S. 
Treasury, down from 1.92 billion tr oz at yearend 1959. The 
year 1965 was also the last year in which U.S. coins were 
made of 900 fine (90 pet Ag) silver. 

The withdrawals of silver bullion from the U.S. 
Treasury stock continued during 1965 and 1966, so that by 
mid- 1967 the indicated level of total silver stocks in the 
Treasury was only about 0.5 billion tr oz. At this point, 
Public Law 90-29 was passed on June 24, 1967. This law 
had three major effects: 

1. It declared that the redemption of silver certificates 
would be terminated as of June 24, 1968. 

2. It provided for the transfer of 165 million tr oz of silver 



bullion from the Treasury to the National Defense 
Stockpile. 

3. It authorized the Secretary of the Treasury to sell silver 
not necessary for the national stockpile at a price not less 
than the monetary value of $1.29/tr oz. 
As a result of the sale authorization, the General Services 
Administration (GSA) held the first of a series of silver sales 
on behalf of the Treasury on June 25, 1968, which resulted 
in the ultimate sale of 305 million tr oz during fiscal years 
1968-71. 

As of 1980, the silver holdings of the U.S. Government 
totaled 182.9 million tr oz, comprising 139.5 million tr oz 
held by GSA for national stockpile purposes, 38.9 million 
tr oz held by the Treasury, and 4.5 million tr oz held by 
the Department of Defense. As small as this holding is com- 
pared with those of the early 1960's, it still represented the 
largest Government-held silver stockpile of any MEC as of 
the early 1980's. 

The net result of all of the above developments during 
the 1960's was that the silver market was totally freed from 
U.S. legislative constraints and the price of silver was al- 
lowed to follow market forces. Trends in prices, consump- 
tion, and mine production since 1968 are discussed in detail 
in the following sections. 



SILVER PRICES, 1968-84 



In mid-February 1968, the price of silver reached a new 
low for the year of $1.81/tr oz, then rose to a high of $2.57/tr 
oz by mid- June, just prior to the termination date for 
redemption of silver certificates. By yearend 1968, the price 
of silver had fallen back to $1.90/tr oz. For the year, the 
average price was $2.15/tr oz (3). 

Seven years later, during 1975, Handy and Harman's 
silver price per troy ounce ranged from $3.91 to $5.23, with 
an average price of $4.42. These levels were slightly more 
than double the levels of 1968. The years of 1976-78 were 
relatively stable, with Handy and Harman's silver prices 
ranging from $3.82/tr oz to $6.30/tr oz (4). 

It was only in 1979 that the silver price began a 
dramatic rise. The lowest price of 1979 was reached on 
January 11, at $5.96/tr oz. By yearend, the price had in- 
creased to $28.00/tr oz and the rise continued into early 1980 
when a high of $48.00/tr oz was attained on January 21 (4-5). 
Thus, in little more than a year the price of silver had risen 
over 800 pet. But the subsequent fall in price was even 
steeper; just 4 months later, on May 22 the price was only 
$10.80/tr oz, the 1980 low (5). 

The extreme sharpness of the rise and fall during 1979 
and 1980, along with allegations that the Hunt brothers 
(Bunker and Nelson of Dallas, TX) and others attempted 
to corner the market for silver, indicate that the volatility 
was not based on fundamentals of supply and demand. The 
final report to Congress of the Commodities Futures 
Trading Commission (CFTC) on this incident, delivered in 
May 1981, stated that as of the end of October 1979, the 



Hunts and others controlled more than 20 pet (approxi- 
mately 100 million tr oz) of the estimated worldwide com- 
mercial demand for silver. In addition, they held futures 
contracts representing an additional 140 million tr oz, 
which, if required to be converted into physical bullion, 
could not easily be met from readily available supplies. The 
CFTC's conclusion was that this situation had led to the 
price increases of late 1979 and early 1980 with the result 
that the price of silver temporarily rose far above the level 
that has subsequently been sufficient to balance supply and 
demand for silver. Considering that the 140-million-tr oz 
futures contract obligation of the Hunts represented more 
than half of the total annual MEC mine silver production, 
it is apparent that this situation had a profound effect on 
the silver market. 

Subsequent market prices for silver support the CFTC's 
conclusion. For the years 1981-84, Handy and Harman's 
silver prices have ranged from a low of $4.88/tr oz (reached 
in June 1982) to a high of $16.45 (early in 1981) (6). The 
2-yr period of 1983-84 shows even more stability, with the 
price per troy ounce ranging from $8.34 to $14.74 during 
1983 (7) and from $6.26 to $10.04 during 1984 (6). 

Historical silver prices for 1960-84 are illustrated in 
figure 3. It should be noted that if the average prices for 
the years 1968, 1975, 1983, and 1984 are compared on a 
1983 U.S. constant-dollar basis (comparing real price in- 
creases or decreases), the average price in 1984 of $8.14/tr 
oz (6) was slightly above that of 1975 and only about 40 pet 
higher than the 1968 level. 



25 



I I I f 



I II I 



I I I I I I I I I 



20 



tr 

UJ 

> 10 

_j 



T I T 



Average New York price 




Ql I I I '''''''■■■■'■■■■'■'■' 

I960 1965 1970 1975 1980 1985 



Figure 3.— Silver price history, 1960-84. 



MEC NEW MINE PRODUCTION AND CONSUMPTION, 1968-83 



The U.S. Treasury was faced with a tremendous in- 
crease in MEC silver consumption during the late 1950's 
and the 1960's. Table 1 compares MEC consumption 
estimates for the years 1952, 1965, 1975, and 1983. As 
shown, MEC silver consumption increased from 271 million 
tr oz in 1952 to 717 tr oz in 1965, then decreased to 416 
million tr oz by 1975, and to 367 million tr oz in 1983. Of 
particular note is the enormous increase of 277 million tr 
oz for U.S. coinage uses from 1952 to 1965, followed by the 
subsequent drop to only 2 million tr oz for U.S. coinage use 
by 1983, owing to the elimination of 90-pct-silver U.S. coins 
after 1965. In comparison, total MEC new mine silver pro- 
duction only increased from about 186 million tr oz in 1952 
to 218 million tr oz in 1965. Essentially, the deficit of total 
consumption compared with new mine production amounted 
to about 500 million tr oz for the year 1965. The interplay 
between these two forces since the late 1960's is described 
in the following paragraph. 

Consumption of silver in MEC's decreased by 16.5 pet 
from 1968 through 1983, while U.S. consumption decreased 
by 17.8 pet over the same period. U.S. silver consumption 
as a percentage of total MEC silver consumption also fell 
slightly, from 33.3 pet in 1968 to 32.8 pet in 1983. In con- 
trast, during the same period total MEC new mine silver 
production increased 32.9 pet, from 232 million tr oz in 1968 
to 308 million tr oz in 1983. The result is that the deficit 
of consumption versus new mine production, which was 
207.2 million tr oz in 1968, had been closed to only 59 
million tr oz by 1983. Indications are that for 1984 the 
deficit had been closed further, to between 25 and 35 million 
tr oz. 

Obviously, if an annual deficit between consumption 
and new mine production exists, then demand is being 
satisfied from sources other than new mine production (such 
as from stocks and reclaimed industrial scrap). In order to 
understand the supply-and-demand relationships for silver, 
one must look back to historical production statistics to 
determine the amount of existing stocks of silver from prior 
production. The 1953 Minerals Yearbook reported a U.S. 
Bureau of the Mint estimate that total world output of silver 
from 1493 through 1953 was 19.8 billion tr oz (8, p. 1025). 



Table 1.— Consumption and mine production of silver in 

market economy countries for the years 1952, 1965, 1975, 

and 1983 

(Million troy ounces) 

1952 1965 1975 1983 
U.S. consumption: 

Industrial 97 137 158 116 

Coinage 43 320 3 2 

Subtotal 140 457 161 118 

Other MEC consumption: 

Industrial 70 199 219 232 

Coinage 61 61 36 17 

Subtotal 131 260 255 249 

Total MEC consumption 271 717 416 367 

Total MEC mine production . 186 218 232 308 
Total deficit (consumption 

less production) 85 499 184 59 



The Bureau of the Mint further estimated that, as of 1953, 
about one-third of this total production (6.54 billion tr oz) 
was in circulation as coinage or held by governments for 
monetary purposes, a similar amount was privately held 
(including hoarded stocks), and another one-third had been 
misplaced or dissipated. 

From 1954 through 1983, about 8.5 billion tr oz of total 
additional silver had been produced by mines in all coun- 
tries, and U.S. Government stocks had been almost com- 
pletely liquidated. Assuming that the circulation coinage 
and Government stocks in MEC's as of 1953 had passed 
completely into private ownership and that the entire 
1954-83 production also passed entirely into private stocks, 
then about 21.5 billion tr oz would be in private stocks as 
of 1984. However, subtracting cvunulative 1954-83 MEC in- 
dustrial consumption of an estimated 10 billion tr oz, and 
an additional 1.5 to 2.0 billion tr oz of estimated CPEC in- 
dustrial consumption during the same period (assuming 
none of this silver was recovered), then private stocks could 
be as low as 9.5 to 10.0 billion tr oz.* 



This estimate is slightly higher than most other estimates, which range 
from 6 to 8 billion tr oz, but much less than a few estimates that have been 
as high as 20 to 25 billion tr oz. 



SILVER MINE PRODUCTION AND TYPE OF OCCURRENCE 



World silver resources are contained within five major 
economic categories of deposits: (1) predominantly silver 
deposits, (2) predominantly zinc deposits, (3) predominantly 
lead deposits, (4) predominantly copper deposits, and (5) 
predominantly gold deposits. The economics of silver pro- 
duction from each of these resource categories is different, 
yet interdependent upon the prices and markets for the 
associated commodities; this is especially so with the last 
four resource categories. The percentage contribution of 
each category to total silver production varies for each 
country, but on a worldwide basis a majority of silver pro- 
duction is as a byproduct or coproduct of base-metal opera- 
tions. For example, Australia (the fifth largest MEC and 
sixth largest world silver producer) obtained effectively 100 
pet of its 1984 silver production as a byproduct or coproduct 
of lead, zinc, copper, and gold operations. Conversely, ap- 
proximately 60 pet of reported 1984 production in the 



United States (the third largest MEC and fourth largest 
world silver producer) came from the estimated output of 
the 14 evaluated predominantly silver operations, as herein 
defined. In Mexico and Peru (the two largest world silver 
producers), predominantly silver operations are estimated 
to account for approximately 42 and 27 pet, respectively, 
of total reported 1984 mine production. 

The distribution of byproduct or coproduct silver pro- 
duction also varies from country to country. In the United 
States and Canada, for example, byproduct silver produc- 
tion from primary copper mines is a significant source of 
total annual output, whereas in Mexico and Peru the most 
significant such source is from predominantly lead and zinc 
operations. Worldwide, lead and zinc operations are the 
largest source of silver production. 

The production data of table 2 and figure 4 demonstrate 
a number of major points: 



1. The MEC's accounted for 79 pet of world silver mine 
production in 1984. 

2. The four largest MEC producers (Mexico, Peru, the 
United States, and Canada) accoiuited for between 61 and 
66 pet of total MEC mine production for ail the years shown. 
The six largest world producers accounted for between 68 
and 76 pet of total world silver mine production for all the 
years shown, demonstrating dominance by only a few major 
producing countries. 

3. Total MEC silver production increased by 12 pet over 
the ll-5Tr period from 1971 to 1981, or just over 1 pct/yr. 
In just the 2-yr period from 1981 to 1983, however, produc- 
tion increased by a much more rapid 16 pet, or approxi- 
mately 8 pct/yr. Production data for 1984 indicate a 
slowdown in the increasing world production trend, with 
production in most countries either remaining constant, 
declining, or increasing only slightly. The net result for 
MEC countries was a 1-pct decline in reported production 
for 1984. 

4. The largest production increases since 1971 have 
come from Mexico and Peru, the two largest world silver 
producers. These two countries accounted for a combined 
31 pet of total world (39 pet of total MEC) production in 1984, 
up from 25 pet of world and 30 pet of MEC production in 



Table 2.— Mine production of silver in 1971, 1981, 1983 and 
1984 for the six largest producing countries 

Production, 10* tr oz Change, pet 

1971 to 1983 to 

1971 1981 1983 1984p 1981 1984 

Silver-producing countries: 

Mexico 36.6 52.9 61.4 67.8 45.0 10.0 

Peru 38.4 46.9 55.9 56.5 22.0 1 .0 

United States 41 .5 40.7 43.4 44.4 (-2.0) 2.0 

Canada 46.0 36.3 35.6 37.6 (-21.0) 6.0 

Subtotal, 4 largest 

MEC producers 162.5 176.8 196.3 206.3 9.0 5.0 

Soviet Union' 39.0 46.5 47.2 47.4 19.0 .0 

Australia 21.7 23.9 32.2 32.0 10.0 .0 

Subtotal, 6 largest 

world producers 223.2 247.2 275.7 285.7 11.0 4.0 

Total MEC production 246.9 276 9 321.1 316.6 12.0 (-1.0) 

Total world production 294.7 361 .8 390.6 398.6 23.0 2.0 

p Preliminary. 

'Soviet Union silver production data are estimates. 

1971. During 1984, Mexico's production increased by a fur- 
ther 10 pet. 

5. On a percentage basis, mine production of silver has 
increased most significantly in Mexico (85.3 pet), Peru (47.1 
pet), and Australia (47.5 pet) from 1971 through 1984. These 
three countries accounted for 85.5 pet of the increase to MEC 
annual output over this period. 





World = 398.6 million troz MEC » 316.6 million troz 

Figure 4.— Relative 1983 silver production shares, by country and country grouping. 



DEMONSTRATED RESOURCES OF SILVER IN MARKET ECONOMY COUNTRIES 



In 1968, the USGS, in Professional Paper 820 (9), 
estimated total MEC in situ silver reserves (including U.S. 
reserves) at 3.2 billion tr 02, contained in measured plus in- 
dicated ores, plus an additional 2.2 billion tr oz contained 
in inferred ores. This total of 5.4 billion tr oz represented 
silver contained in identified deposits from which minerals 
can be "extracted profitably with existing technology and 
under current economic conditions." The same source 
estimated in situ U.S. silver reserves at 0.59 billion tr oz 
in the measured plus indicated categories and 0.85 billion 
tr oz in the inferred category, for a combined total of 1.44 
billion tr oz. Thus, U.S. reserves represented 18.4 pet of the 
entire MEC in situ demonstrated reserve (measured plus 
indicated reserves) and 26.6 pet of the measured plus in- 
dicated plus inferred reserves in these 1968 estimates. 

In the 16-yr period following the 1968 estimates, the 
price range of silver increased 375 to 400 pet in nominal 
terms and about 40 pet in real terms. Also, during that time, 
total MEC new mine production of silver was about 3.95 
billion tr oz, of which U.S. production represented about 0.64 
billion tr oz. In addition, technological and operational ad- 
vancements have occurred in terms of mining equipment, 
heap leaching practices, carbon extraction methods, 
geological and exploration techniques, and smelting- 
refining. With these recent changes in mind, this study's 
estimate of demonstrated silver MEC resources as of 
January 1984 is presented in tables 3 and 4. This study has 
only estimated the demonstrated resource level of mineable 
ore at identified deposits and mining operations. No attempt 
to estimate hypothetical resources has been attempted, and 
inferences of possible resources have been made in only a 
few cases. 

As shown in table 3, demonstrated silver resources of 
the 436 mines and deposits included in this study were ap- 
proximately 8.16 billion tr oz of contained silver as of 
January 1984. This is 2.76 billion tr oz larger than the 5.4 
billion tr oz estimated to be contained in "measured plus 
indicated plus inferred in situ reserves" estimated back in 
1968 and would represent a productive life of about 27 yr 
at 1983 production levels of the MEC's. 

Because absolute coverage of all undeveloped deposits 
in the 41 countries included in this study has not been 
achieved, this study's total estimate should be considered 
as conservative. As shown in table 3, 64.9 pet (5.29 billion 
tr oz) is contained in 339 producing mines while only 35.1 
pet (2.86 billion tr oz) is contained in 97 explored deposits 
or developing mines not in production as of 1983-84. Also 
of interest is that 62 of the 97 undeveloped deposits included 
in this study are in only three countries, with 30 in the 
United States, 24 in Canada, and 8 in Australia. Thus, the 
total demonstrated resource estimate for any study of this 
type has inherent biases towards such countries, where 
more effort has been put into analysis of all known deposits. 

It should be noted that, while the breakdown of produc- 
ing mines versus undeveloped deposits and idle mines 
shown in table 3 provides a general ratio of silver resources 
between producing mines and nonproducing deposits, it can- 
not provide an exact production status of every mine or 
deposit included in this study. The production status of 
silver producing mines, particularly lead and zinc mines, 
is in a constant state of flux depending on the state of the 
economy and the prices realized for the various 
commodities. 



The 1984 demonstrated resource estimates of contained 
silver and production status shown in table 3 are based on 
January 1982 data, as updated to January 1984. Thus, the 
1984 demonstrated resource reflects subtraction of 2 )t or 
production from the producing mines with no assumed or 
estimated replacement of extracted resources diu"ing the 
2-yr period. , 

A more meaningful method of providing resource 
estimates of silver is to provide demonstrated resource data 
in terms of the recoverable silver fi-om each mine or deposit. 
Resource comparisons in terms of recoverable silver provide 
a more accurate picture of the resource, since silver losses 
during processing can be significant. The reader should note 
that all of the resource estimates, potential availability 
estimates, and silver grade estimates throughout the re- 
mainder of this study are expressed in terms of recoverable 
silver unless otherwise specified. Table 4 shows these 
estimates as of January 1984, by country and by predomi- 
nant commodity classification. 

As shown in table 4, this study estimates a recoverable 
demonstrated resource of 5.99 billion tr oz Ag as of January 
1984 fi-om the 436 mines and deposits included in the study. 
Of this total, only 1.41 billion tr oz (23.5 pet) is in the 66 
mines and deposits classified as predominantly silver 
deposits. The largest quantity of silver, 2.6 billion tr oz (43.9 
pet), lies in the 121 mines and deposits classified as 
predominantly zinc deposits; 1.6 billion tr oz (26.5 pet) is 
in mines and deposits classified as predominantly copper 
deposits; 245 million tr oz (4.1 pet) is in mines and deposits 
classified as predominantly lead deposits; and 120.2 million 
tr oz (2.0 pet) is in predominantly gold mines and deposits. 

Comparing the recoverable silver resource estimate of 
5.99 billion tr oz as of January 1984 with the estimated con- 
tained silver resource of 8.16 billion tr oz leaves a difference 
of 2.17 billion tr oz. This difference, equivalent to 26.6 pet, 
represents the estimated losses in benefieiation, smelting, 
and refining. On a primary commodity basis, these losses 
equate to 19.0 pet for the predominantly silver deposits, 26.4 
pet for the predominantly zinc mines and deposits, 18.4 pet 
for the predominantly lead mines and deposits, 33.7 pet for 
the predominantly copper mines and deposits, and 21.4 pet 
for the predominantly gold mines and deposits. 

On a country basis, 5.83 billion tr oz, or 97.4 pet of the 
recoverable silver resource as of January 1984, is contained 
in the top 20 countries listed in table 4. Only 153.6 million 
tr oz, or 2.6 pet of the total, is contained in the 21 other in- 
eluded countries. Almost 85 pet of the MEC demonstrated 
resource is located in seven countries: the United States 
(1.32 billion tr oz), Mexico (1.08 billion tr oz), Canada (971 
million tr oz), Australia (717 million tr oz), Peru (604 million 
tr oz), the Republic of South Africa (222 million tr oz), and 
Chile (153 million tr oz). All these countries were among 
the eight largest MEC silver producers in 1983. These seven 
countries contain 93.7 pet of the silver in primary silver 
deposits, 84.6 pet of the silver in zinc deposits, 76.4 pet of 
the silver in copper deposits, 84.2 pet of the silver in lead 
deposits, and 86.2 pet of the silver in primary gold deposits. 
Japan, the seventh largest MEC silver producer, is ranked 
only in the 18th position in terms of the estimated 
demonstrated silver resources in table 4, which indicates 
that a fair portion of its production probably comes from 
the smelting and refining of imported concentrates. 

Of the 436 included mines and deposits, 339 are 



Table 3.— Contained silver from the demonstrated resources of 436 deposits in market economy countries as of January 1984, 

by status 

Producing or developing deposits Nonproducing deposits 

°"" ^ Resources, 10^ tr oz Ranking^ Resources, 10^ tr oz Ranl<ing^ 

North America: 

Canada 925,658 3 383,938 3 

Mexico 1 ,253,095 1 59,456 10 

United States 965,726 2 750,766 1 

Morocco 42,489 18 14,670 14 

Republic of South Africa 155,482 6 139,200 6 

Other 45,408 17 6,395 18 

India 17,024 23 38,280 1 1 

Japan 59,594 13 NAp NAp 

Philippines 72,340 12 13,865 15 

Other 22,229 20 NAp NAp 

Central America: 

Panama NAp NAp 198,902 5 

Other 36,823 19 NAp NAp 

Europe: 

France 7,202 24 22,210 13 

Greece 59,548 14 NAp NAp 

Portugal 123,828 8 10,249 16 

Spain 96,477 10 61 ,051 8 

Sweden 1 1 1 ,188 9 NAp NAp 

Yugoslavia 58,272 15 8,545 17 

Other 72,744 11 1,233 19 

Oc63ni3' 

Australia 392,012 5 631 ,944 2 

Papua New Guinea 52,687 16 28,395 12 

South America: 

Argentina 21,629 21 114,551 7 

Chile 151,579 7 60,507 9 

Peru 531,970 4 318,169 4 

Other 18,038 22 397 20 

Tot al 5,293,043 NAp 2,862,723 NAp 

NAp Not applicable. 

^Ranking based on total contained silver in analyzed demonstrated resources at properties included in this study and listed in Appendix B. 

NOTE.— Data may not add to totals shown because of Independent rounding. 



Table 4.— Recoverable silver from the demonstrated resources of 436 deposits in marl<et economy countries as of January 1984, 

by predominant commodity 



Silver 



Lead 



Zinc 



Copper 



Gold 



Total 



uountryi 


Resources, 


Number of 


Resources, 


Number of Resources, 


Number of Resources, 


Number of Resources, 


Number of Resources, 


Number of 




103 tr oz 


deposits 


103 tr oz 


deposits 


lO^tr oz 


deposits 


103 tr oz 


deposits 


103troz 


deposits 


103 tr oz 


deposits 


United 


























States . 


505,790 


22 


74,735 


9 


289,814 


12 


438,058 


34 


1 1 ,709 


16 


1,320,106 


93 


Mexico . . . 


492,856 


14 


32,158 


2 


382,199 


17 


168,975 


4 


— 


— 


1,076,188 


37 


Canada . . 


71,431 


6 


— 


— 


625,885 


26 


267,994 


24 


5,978 


17 


971,288 


75 


Australia . 


— 


— 


28,688 


1 


672,065 


12 


14,711 


5 


1,327 


7 


716,791 


25 


Peru 


205,214 


11 


— 


— 


213,938 


16 


185,179 


6 


— 


— 


604,331 


33 


South 


























Africa . . 


44,704 


1 


70,784 


1 


37,663 


1 


1,979 


1 


66,772 


42 


221 ,902 


46 


Chile .... 


— 


— 


— 


— 


— 


— 


135,662 


5 


17,808 


1 


153,470 


6 


Portugal . . 


— 


— 


— 


— 


107,774 


1 


5,125 


1 


— 


— 


112,899 


2 


Argentina 


— 


— 


— 


— 


19,252 


1 


67,162 


2 


— 


— 


86,414 


3 


Panama . . 


— 


— 


— 


— 


— 


— 


83,541 


1 


— 


— 


83,541 


1 


Sweden . . 


340 


1 


7,083 


1 


32,020 


2 


30,165 


2 


— 


— 


69,608 


6 


Spain .... 


38,925 


2 


1,056 


1 


24,410 


2 


5,134 


2 


— 


— 


69,525 


7 


Papua New 
Guinea . 


























— 


— 


— 


— 


— 


— 


56,252 


3 


— 


— 


56,252 


3 


Morocco . 


21,340 


3 


18,981 


5 


6,310 


1 


689 


1 


— 


— 


47,320 


10 


Yugoslavia 


— 


— 


— 


— 


— 


— 


45,613 


3 


— 


— 


45,613 


3 


Philippines 


— 


— 


— 


— 


— 


— 


43,674 


16 


1,837 


3 


45,511 


19 


India .... 


— 


— 


— 


— 


42,536 


3 


— 


— 


— 


— 


42,536 


3 


Japan . . . 


— 


— 


— 


— . 


42,422 


8 


— 


— 


— 


— 


42,422 


8 


Greece . . 


— 


— 


— 


— 


41,227 


2 


— 


— 


— 


— 


41,227 


2 


France . . . 


10,686 


1 


— 


— 


14,767 


4 


— 


— 


— 


— 


25,453 


5 


Other coun 


























tries2 . . 


17,592 


3 


1 1 ,466 


1 


73,211 


13 


36,613 


10 


14,739 


22 


153,621 


49 


Total . . . 


1 ,408,878 


66 


244,951 


21 


2,625,493 


121 


1,586,526 


120 


120,170 


108 


5,986,018 


436 



— Indicates no recoverable silver and mines or deposits. 

'Listed in order of total resources. 

2The 21 countries include Italy and Finland with predominantly silver mines; Honduras, Namibia, Federal Republic of Germany, Italy, Zaire, Bolivia, Ireland, 
Burma, Greenland, Algeria, and Zambia with silver in predominantly lead-zinc deposits; Namibia, Turkey, Finland, Indonesia, Brazil, Nonway, Malaysia, and 
Zimbabwe with silver in predominantly copper deposits; Dominican Republic, Bolivia, Brazil, Taiwan, Zimbabwe, and Colombia with silver in predominantly 
gold deposits. 



10 



estimated to be in production as of 1984, while 7 are in, or 
close to, development, and 90 are considered explored 
deposits as of 1984-85. 

PREDOMINANTLY SILVER DEPOSITS 

The 66 evaluated predominantly silver properties in- 
clude 14 U.S. producing mines, 8 U.S. nonproducing 
(undeveloped) deposits, 39 foreign producing mines, and 5 
foreign nonproducing deposits. These properties are listed 
in table B-1. 

Table 5 presents estimates of demonstrated silver 
resources as of January 1984 for all 66 predominantly silver 
properties. The data are disaggregated into resource 
categories that show the amount of silver in both produc- 
ing and undeveloped (or closed) properties at grades of either 
greater than or less than 100 g/mt Ag. 

Of the total silver in the predominantly silver deposits, 
86 pet is represented by the 53 producing operations. Figure 
5 provides a percentage breakdown, by country, of the total 
recoverable silver available from these 53 producing 
operations. 

The eight undeveloped U.S. deposits account for 50.7 
pet of the total resource of 211.6 million tr oz contained in 
all 13 of the nonproducing deposits; in addition, one deposit 
in the Republic of South Africa accounts for 21.1 pet, one 
deposit in Peru for 15.3 pet, two deposits in Canada for 7.8 
pet, and one deposit in France (which closed in 1982) for 
5.1 pet. 

Total quantities of silver, and recoverable ore tonnages 
for producing mines and undeveloped deposits along with 
weighted-average mill feed grades, recoverable silver 
grades, and silver recovery are presented, by country, in 
table 6. 

The data presented in tables 5 and 6 point out that the 
higher grade mines tend to be the mines currently in pro- 
duction, with the explored deposits and closed mines tend- 
ing to have lower average silver grades. Of the 38 mines 
and deposits with average recoverable silver grades higher 
than 100 g/mt, 36 are producing mines and only 2— the 
Revenue-Virginius deposit in Colorado and the Trixie Mine 
in Utah— are undeveloped deposits. 




53 


1,197.3 


2 

11 


8.3 
203.3 


13 


211.6 



TofiQl recoveroble silver 
1, 197, 297,000 tr 02 

Figure 5.— Distribution of total primary silver available from 
14 U.S. and 39 foreign predominantly silver producers. 



Table 5.— Demonstrated resource data for 66 predominantly* 
silver properties, by status and recoverable silver grade in ore 

Status and recoverable Number Recoverable 

silver grade In ore °' . .11 ®'^' 
properties 10^ tr oz 

Producers: 

Greater than 100 g/mt 36 741.1 

Less than 100 g/mt 17 456.2 

Subtotal 

Nonproducers: 

Greater than 100 g/mt ... 
Less than 100 g/mt 

Subtotal 

Grand total 66 1 ,408.9 

1 Defined as containing less than 3.5 pet combined lead and zinc. Includes 
1 exception, the Lucky Friday Mine in Idaho, with 1 1 pet combined lead and 
zinc. 



Table 6.— Summary of demonstrated resource and recovery 

data for predominantly silver properties in MEC's, by status 

and country 

Recov- Recov- VVtd av ore silver 

_ , erable erable grade,' g/mt rgcov- 

Co"nt^ ore, silver, ^^ ery, 

103 mt lO^troz Feed ^^^°' pet 

Producing mines: 
United States: 

Idaho 27,972 274,987 323.6 305.8 94.5 

Montana 34,325 61,062 61.6 55.3 89.8 

Nevada 20,562 30,752 67.5 46.5 68.9 

Others^ 3,324 31,662 347.3 296.2 85.3 

Total United States . . 86,184 398,463 159.1 143.8 90.4 

Canada 37,012 54,877 58.2 46.1 79.2 

Mexico 144,428 492,856 126.4 106.1 83.9 

Morocco 2,128 21,340 366.6 311.9 85.1 

Peru 38,955 172,904 164.0 138.1 84.2 

Others3 113,865 56,857 29.2 15.5 53.1 

Total 422,571 1,197,297 105.6 88.1 83.4 

Nonproducing deposits: 

United States 74,803 107,328 64.9 44.6 68.7 

Others" 115,698 104,253 40.1 28.0 69.8 

Total 190,501 211,581 49.9 34.5 69.1 

Data may not add to totals shown because of independent rounding. 

'Conversion: 31.1035 g = 1 tr oz. 

^Includes Colorado, New Mexico, and Utah. 

^Includes Finland, Italy, Spain, and Sweden. 

"Includes Canada, France, Peru, and Republic of South Africa. 

United States 

The 22 U.S. silver properties (14 producing and 8 
undeveloped) represent 35.9 pet of the total silver resource 
classified as predominantly silver resources for this study. 
The highest grade U.S. mines are the four Coeur d'Alene 
mines in Idaho, with ores grading from 535 to 835 g/mt Ag. 
In total, the Coeur d'Alene mines are estimated to contain 
244.5 million tr oz and represent over 61 pet of the 
recoverable resource from the 14 analyzed U.S. producing 
mines. 

The Troy, MT, silver-copper mine and the Delamar, ID, 
silver-gold mine have a combined silver content of 81.7 
million tr oz, and dominate the category of producing mines 
with less than 100 g/mt Ag. The Troy Mine is a large-scale 
underground mine, and the Delamar is an open pit opera- 
tion. They are typical low-cost mining operations that allow 
deposits with only 50 to 60 g/mt Ag to be economically ex- 
ploited in the United States. 

The 14 producing U.S. silver mines average' 143.8 g/mt 
Ag, which is more than 3 times higher than the 44.6 g/mt 

'Unless otherwise specified all averages presented in the remainder of this 
publication represent averages weighted on a total recoverable silver basis. 



11 



Ag for the 8 undeveloped deposits. By contrast, the five pro- 
ducing U.S. mines with less than 100 g/mt Ag average only 
38.6 g/mt Ag, which is slightly lower than the 41.3 g/mt 
Ag for the five undeveloped deposits in this category. 
However, three of these producers are open pit operations 
and another is a large-scale, low-cost underground opera- 
tion, while three of the five undeveloped deposits would 
have to utilize more costly underground mining methods. 

Other Market Economy Countries 

The 39 foreign producing mines and the 5 foreign non- 
producing deposits classified as predominantly silver 
deposits represent 64.1 pet of the total predominantly silver 
resource estimated in this study. The producing mines con- 
tain 798.8 million tr oz Ag, which represents 88.4 pet of the 
total silver in all 44 of the included foreign predominantly 
silver deposits. 

This non-U. S. predominantly silver category is 
dominated by Mexico and Peru, with 14 and 11 properties, 
respectively. All of the Mexican and Peruvian properties 
are producing mines except for the Berenguela deposit in 
Peru. 

The 14 producing mines in Mexico average 106.1 g/mt 
Ag, ranging from 64 to 375 g/mt. This average grade is 
dominated by the presence of the huge, low-cost Real de 
Angeles surface mine, which contains the largest silver 
resource in the world but has a silver grade of slightly under 
64 g/mt. The producing mines in Peru average 138.1 g/mt 
Ag. Further discussions of deposit and operational aspects 
in Mexico and Peru appear in the "Operating Costs and 
Operational Characteristics" section of this report. 

The 27 producing foreign mines having silver grades 
greater than 100 g/mt contain a total of 449.5 million tr 
oz Ag. Of these 27 mines, 8 are estimated to contain greater 
than 15 million tr oz each (herein referred to as major 
mines); these 8 major mines contain 71 pet of the total silver 
in all 27 of these foreign producers. Four (Las Torres, Lam- 
pazos, Santa Maria de La Paz, and Real del Monte y 
Paehuca) are located in Mexico, and four (Areata, Juleani, 
Uehucehueua, and Quiruvilca) in Peru. The four Mexican 
mines in this group range in grade from 140 to 244 g/mt 
and contain a combined 197.2 million tr oz Ag. The fovu- 
Peruvian mines in this group range in grade from 104 to 
388 g/mt and contain a combined 122.2 million tr oz Ag. 

The 12 producing foreign mines with grades less than 
100 g/mt contain a total of 349.3 million tr oz Ag. Five ma- 
jor mines (Detour Project in Canada, Real de Angeles and 
Avino in Mexico, Alpamarca in Peru, and Aznalcollar in 
Spain) contain 92.6 pet of the total silver in this group. The 
two Mexican mines in this group range in grade from 63.6 
to 96.2 g/mt Ag and contain 244.2 million tr oz Ag. The other 
three, in Peru, Canada, and Spain, range in grade from 16.4 
to 34.6 g/mt Ag and contain a combined 79.1 million tr oz 
Ag. These five deposits are mined by either surface min- 
ing methods or a combination of surface and large-scale 
underground mining methods. 

In summary, the 13 major foreign producers comprise 
80.5 pet of the total predominantly silver resources in 
foreign MEC countries and are represented by 6 producing 
mines in Mexico, 5 in Peru, and 1 each in Canada and Spain. 
By comparison, the 6 major U.S. producers contain 84.9 pet 
of the total U.S. predominantly silver resource. 

Of these 13 major foreign deposits, 8 were in produc- 
tion during the mid- to late-197()'s and 5 were developed 
dvu4ng the late 1970's and early 1980's. By comparison, the 
six major U.S. predominantly silver operations are 



represented by four major Coeur d'Alene operations, which 
were in production during the mid- to late-1970's and by 
the Troy, MT, and the Delamar, ID, operations, which were 
developed in the late 1970's and early 1980's. Of the com- 
bined total of two major U.S. and five foreign mines most 
recently developed, all but one have silver grades of less 
than 100 g/mt. Also, it is interesting that, of the 981.2 
million tr oz Ag in all 19 of the major U.S. and foreign 
deposits, nearly 50 pet (488.7 million tr oz) is contained in 
the 7 deposits that were developed in the late 1970's and 
early 1980's. 



PREDOMINANTLY ZINC DEPOSITS 

The 121 predominantly zinc properties included in this 
study represent the largest source of silver of the five deposit 
classifications. These properties, listed in table B-2, consist 
of 4 U.S. producing mines, 8 U.S. nonproducing deposits, 
81 foreign producing mines, and 28 foreign nonproducing 
deposits. 

The 2.63 billion tr oz Ag in the predominantly zinc 
mines and deposits accounts for 43.9 pet of the total in all 
five deposit classifications, with 289.8 million tr oz con- 
tained in the 12 U.S. properties and 2,335.7 million tr oz 
in the 109 foreign properties. 

The silver in the U.S. predominantly zinc deposits is 
heavily concentrated in deposits in nonproducing status as 
of 1984; i.e., the four U.S. producers are estimated to con- 
tain only 4.8 million tr oz Ag, while the eight U.S. non- 
producers contain 285.0 million tr oz. In turn, the silver in 
the U.S. nonproducers is largely contained in four Alaskan 
properties— 234.2 million tr oz— with the continental U.S. 
nonproducers containing only 50.8 million tr oz. Two of 
these Alaskan nonproducers— the Red Dog and Green's 
Creek deposits— were close to a development decision in 
1984; these two properties contain an estimated 182.1 
million tr oz Ag. 

In terms of silver grades, the four U.S. producers 
average 29.0 g/mt (range of 1.1 to 114.0 g/mt), and the eight 
U.S. nonproducers average only 45.3 g/mt (range of 16.6 to 
321.1 g/mt). The four Alaskan nonproducers overall average 

58.2 g/mt (range of 33.6 to 321.1 g/mt), and the four other 
nonproducers average only 22.4 g/mt (range of 16.6 to 119.3 
g/mt). The Red Dog and Green's Creek deposits have es- 
timated silver grades of 57.6 and 321.1 g/mt, respectively. 

By contrast, the silver in foreign predominantly zinc 
properties is heavily represented by producing properties, 
with the 81 producers containing a total of 1,651.9 million 
tr oz and the 28 nonproducers 683.8 million tr oz. Mexico 
(with 17), Peru (with 16), Canada (with 11), and Australia 
(with 7) dominate the foreign producers category, while 
Canada (with 15) and Australia (with 5) dominate the 
foreign nonproducers category. The 51 producers in Mex- 
ico, Peru, Canada, and Australia contain a total of 1,313.6 
million tr oz Ag, and the 20 nonproducers in Canada and 
Australia contain a total of 580.5 million tr oz. 

In term of silver grades, the 81 foreign producers 
average 58.1 g/mt (range of 5.5 to 330.7 g/mt), and the 28 
foreign nonproducers average only 27.8 g/mt (range of 1.5 
to 151.3 g/mt). The Mexican, Peruvian, Canadian, and 
Australian producers average 108.5, 75.0, 48.4, and 103.0 
g/mt, respectively, and have a combined average grade of 

73.3 g/mt, while the other 30 foreign producers average only 
32.1 g/mt Ag. The 15 Canadian nonproducers average 32.2 
g/mt (range of 1.5 to 151.3 g/mt), and the 5 Australian non- 
producers, 39.6 g/mt (range of 1.6 to 116.1 g/mt); the other 



12 



8 foreign nonproducers average only 11.8 g/mt (range of 8.2 
to 130.8 g/mt). 

Only 1 of the U.S. producers and 2 of the U.S. non- 
producers, but 27 of the foreign producers and 4 of the 
foreign nonproducers, have silver grades in excess of 100 
g/mt. This includes 12 of the 17 Mexican producers, 6 of the 
16 Peruvian producers, and 3 of the 7 Australian producers. 

In summary, the silver in zinc deposits is heavily con- 
centrated in five countries— Australia, Canada, Mexico, the 
United States, and Peru— which account for 83.2 pet of the 
total silver from the listed zinc deposits and for 36.5 pet of 
the 5.99 billion tr oz of total estimated silver in all types 
of deposits in the 41 MEC's. 

Of the 2.63 billion tr oz Ag from zinc deposits, the largest 
amount is in Australia, with 25.6 pet of the total, followed 
by Canada (23.8 pet), Mexico (14.6 pet), the United States 
(11.0 pet), and Peru (8.2 pet). 

The wide range of silver grades in these predominantly 
zinc deposits (1.1 to 330.7 g/mt) shows that the relative 
economic importance of silver to the overall economics of 
zinc production is likewise going to have a wide variation. 
Analysis of these variations is beyond the scope of this 
report but was addressed to some degree in IC 9026. 

In combination, the silver from lead and zinc deposits 
can be a significant percentage of the total demonstrated 
silver resources for a given country. For example, lead and 
zinc deposits account for 97.8 pet of the potentially 
recoverable silver in Australia, 64.4 pet in Canada, 38.4 pet 
in Mexico, 35.6 pet in Peru, and 27.6 pet in the United 
States. 



PREDOMINANTLY LEAD DEPOSITS 

The 21 properties evaluated for this study as 
predominantly lead deposits account for only 4.1 pet of the 
total silver fi-om all types of deposits. These properties, listed 
in table B-3, consist of 7 U.S. producing mines, 2 nonproduc- 
ing U.S. deposits, 10 foreign producing mines, and 2 foreign 
nonproducing deposits. 

The 17 producing operations contain a total of 217.5 
million tr oz Ag, with the 7 U.S. producers containing 67.5 
million tr oz and the 10 foreign producers 150.0 million tr 
oz. The four nonproducing operations contain a total of 27.4 
million tr oz Ag, the two U.S. nonproducers containing 7.3 
million tr oz and the two foreign nonproducers 20.1 million 
tr oz. 

The 9 U.S. properties contain 30.5 pet of the total silver 
in the predominantly lead properties, and the 12 foreign 
properties contain 69.5 pet. All seven of the U.S. producers 
and one of the two U.S. nonproducers are located in 
Missouri. Silver plays a minor role in the economies of the 
Missouri lead mines, with an overall average silver grade 
for all eight properties of only 8.0 g/mt, ranging from 1.5 
to 13.0 g/mt. Thus, the Missouri properties comprise 38.1 
pet of the total number of 21 MEC primary lead properties, 
yet they account for only 18.6 pet of the total silver. The 
nonproducing Ontario Mine in Utah has the highest 
estimated silver grade of the nine U.S. predominantly lead 
properties, at slightly under 108 g/mt. 

The 10 foreign producers include four in Morocco and 
one each in Australia, Mexico, Namibia, the Republic of 
South Africa, Spain, and Sweden. Three of these— the 
Australian, the Mexican, and the South African 
operations— contain 116.5 of the 150.0 million tr oz Ag in 
all 10 of the producing properties. These three properties 



have fairly high silver grades, of 197.1, 245.8, and 69.5 g/mt, 
respectively. The four Moroccan producers contain another 
14.0 million tr oz Ag with a wide grade range of 8.1 to 118.9 
g/mt averaging only 29.3 g/mt. The overall average silver 
grade is 53.6 g/mt for the 10 foreign producers and 99.4 g/mt 
for the 2 nonproducers (1 in Mexico and 1 in Morocco). 

As was the case for the predominantly zinc properties, 
the wide range of silver grades in these predominantly lead 
deposits (1.5 to nearly 250 g/mt) shows that the relative im- 
portance of silver to the overall economics of lead produc- 
tion is likewise going to have a wide variation. Analysis 
of these variations is beyond the scope of this report but 
was addi-essed to some degree in IC 9026. 



PREDOMINANTLY COPPER DEPOSITS 

Approximately 88.4 pet of the total 1.59 billion tr oz Ag 
from the 120 evaluated predominantly copper deposits 
(listed in table B-4) is located in only eight countries, with 
five— the United States, Canada, Mexico, Peru, and Chile- 
having a total of 73 mines and deposits that account for 75.4 
pet of the total. 

Approximately 85 pet of the total silver in all of the 120 
predominantly copper deposits is from only 33 deposits, with 
10 of these in the United States, 4 in Canada, 2 in Mexico, 
5 in Peru, 3 in Chile, and 9 in seven other countries. Of 
these 33 deposits, 28 are considered as major deposits of 
silver (greater than 15 million tr oz Ag per deposit) and ac- 
count for 81.8 pet of the total from all 120 of the evaluated 
copper deposits. These include such producing deposits as 
Cananea in Mexico; Chuquicamata, El Salvador, and Los 
Pelambres in Chile; Kidd Creek, Sam Goosly, and Geco in 
Canada; Bougainville in Papua New Guinea; Majdenpek 
in Yugoslavia; Aitik in Sweden; Cobriza in Peru; and 
Bingham Canyon, Butte Copper, White Pine, Morenci, Twin 
Buttes, and Mission-San Xavier in the United States. It 
should be noted, however, that only 16 of these 28 major 
deposits were in production as of 1984, and such major U.S. 
deposits as Butte Copper, White Pine, and Bingham Canyon 
were closed. The undeveloped deposits in this group include 
Cerro Colorado in Panama, El Pachon in Argentina, An- 
tamina and Toromocho in Peru, and Helvetia East and 
Presque Isle in the United States. 

As a group, the 34 U.S. copper deposits average 2.3 g/mt 
Ag. Similar values for other major countries are 2.0 g/mt 
for the 4 Mexican deposits, 3.8 g/mt for the 6 Peruvian 
deposits, 4.8 g/mt for the 24 Canadian deposits, and 1.8 g/mt 
for the 4 Chilean deposits. In total, all 120 deposits average 
only 2.3 g/mt Ag. 

Of the 28 major deposits, only one (Kidd Creek in 
Canada) has a recoverable silver grade of greater than 50 
g/mt ore. Of the other 92 deposits, only 5 have recoverable 
silver grades greater than 20 g/mt; these deposits (Magma 
in Arizona, Sam Goosly, Izok Lake, and Geco in Canada, 
and Klein Aub in Namibia) are estimated to contain only 
71.4 million tr oz Ag. 

Generally, except in the few noted cases where silver 
grades are above 20 g/mt, the silver grade in nearly all of 
the included 120 deposits is not a major factor in the 
technological or economic aspects of copper operations. 
Byproduct silver from copper deposits, however, is a signifi- 
cant percentage of the total demonstrated silver resource 
from some major producing countries— notably Chile at 88.4 
pet, the United States at 33.2 pet, Peru at 30.7 pet, and 
Canada at 27.6 pet. 



13 



PREDOMINANTLY GOLD DEPOSITS 



The 108 evaluated predominantly gold deposits, listed 
in table B-5, account for only 2 pet of the estimated total 
silver resource. This points out the insignificance of the 
predominantly gold deposits in terms of overall silver 
resources. Basically, the silver produced from the 
predominantly gold deposits represents a natural alloying 
of silver with gold in the ore, and a certain amount of silver 
is present in all dore bullions produced by predominantly 
gold operations. 

Essentially five countries— the Republic of South Africa, 
the United States, Chile, the Dominican Republic, and 
Canada— dominate the total silver in primary gold deposits. 



The 77 deposits in these countries contain 112.7 million 
(93.8 pet) of the 120.2 million tr oz Ag in all 108 of the 
studied deposits. The Republic of South Africa, with 66.8 
million tr oz in 42 deposits, represents over 55 pet of the 
total, followed by Chile (17.8 million tr oz from 1 deposit), 
the United States (11.7 million tr oz in 16 deposits), the 
Dominican Repubic (10.4 million tr oz from 1 deposit) and 
Canada (6 million tr oz from 17 deposits). All but 4 of the 
108 predominantly gold deposits were in production as of 
January 1984. 

The 108 predominantly gold deposits average only about 
0.7 g/mt Ag, though the silver grade ranges ft-om 0.1 to 96.7 
g/mt. Generally, the silver grades in predominantly gold 
deposits are too low to significantly affect the overall 
economies of the gold deposit. 



OPERATING COSTS AND OPERATIONAL CHARACTERISTICS 
FOR PREDOMINANTLY SILVER PROPERTIES 



U.S. PRODUCERS 

The Coeur d'Alene mining district in Northern Idaho 
has had recorded silver production since 1886. Through 
1983, it is estimated that nearly a billion troy ounces (982 
million tr oz) of silver have been produced in the district, 
or an average of 10 million tr oz/yr over the 98-yr period 
of recorded production. During the 5-yr period 1979-83, 
silver production from the Coeur d'Alene District averaged 
.14,156,000 tr oz/yr. 

The four Coeur d'Alene mines included in this 
analysis— Lucky Friday, Sunshine, Galena, and Crescent- 
contain 244.5 million tr oz of demonstrated silver resources 
as of January 1984, or about 61.3 pet of the total recoverable 
silver in all 14 of the producing U.S. predominantly silver 
operations analyzed. The Coeur d'Alene mines are ex- 
tremely high in grade, at 535 to 835 g/mt ore. However, the 
lack of appreciable byproduct revenues from the evaluated 
mines in the Coeur d'Alene District (Lucky Friday being 
the exception) and their relatively high mining costs make 
these mines high-cost producers relative to mines in other 
countries producing silver from complex ores with other 
payable commodities. 

The Coeur d'Alene mines are deep underground mines 
extracting silver ore from many individual, relatively thin 
veins or vein systems. Because many of these mines are old, 
the stoping areas are spread out laterally on various levels, 
which increases development and haulage costs. The mines 
have relatively small production capacities, ranging from 
32,000 to 230,000 mt/yr ore, with an average production 
capacity of about 160,000 mt/yr. These operating conditions, 
along with high labor costs, result in the relatively high 
cost structure of the Coeur d'Alene mines despite the ex- 
istence of high silver grades. 

Mining productivities at the Coeur d'Alene operations 
were estimated to range from 2 to 4 mt per worker-shift. 
The estimated mining costs* ranged from $86.00 to $155.00 
per metric ton of ore, averaging $122.80/mt. Labor costs, 
including prorated administrative labor costs, were 
estimated to range from 43 to 59 pet of total mining costs. 



'In this publication all mining, milling, transportation, and smelting- 
refining costs exclude depreciation, interest charges, taxation, royalties, as 
well as revenues from nonsilver commodities. All of those items are treated 
as separate cost items in determining total costs. 



Milling costs were estimated to range from $12.76/mt to 
$30.03/mt ore, averaging $18.63/mt. Overall, mining plus 
milling costs were estimated to range from $99.00/mt to 
$179.00/mt, with the estimated costs for smelting, refining, 
and transport of the concentrates adding 6.7 to 15.2 pet to 
the mining plus milling costs. 

The other 10 U.S. predominantly silver producers, 
located in Colorado, Idaho, Montana, Nevada, New Mex- 
ico, and Utah, have all begun production since 1969. These 
10 mines, estimated to contain 154 million tr oz Ag, are also 
estimated to have a production capacity of slightly over 15 
million tr oz in 1984. The recoverable silver amount in these 
10 mines equals 38.7 pet of the total from the 14 U.S. 
predominantly silver producers. 

These 10 "new" mines can be classified into three 
separate categories based on mining type and size of opera- 
tion. Six of the mines (Bulldog, Clayton, Black Pine, 
Sixteen-to-One, St. Cloud, and Escalante) are small-scale 
undergrovmd mines; one (Troy) is a large-scale underground 
operation; and three (Delamar, Taylor, and Candelaria) are 
surface operations. 

Since all 10 of these mines have been developed during 
the period 1969-82, they demonstrate recent changes in the 
U.S. primary silver mining industry. Some of these 
developments are summarized as follows: 

1. The development of three major surface mining 
operations for primary silver production. 

2. The development of the Troy, MT, silver-copper deposit 
and the possibility of similar developments in or near the 
adjacent Cabinet Wilderness area. 

3. The application of modified Vertical Crater Retreat 
(VCR) underground stoping methods such as at the 
Escalante, UT mine. 

4. The development of a major heap-leaching operation for 
primary silver production. 

5. The use of conventional cyanide agitation leaching at 
primary silver operations. 

The six small-scale underground mines represent extrac- 
tion of an annual combined ore capacity of 866,000 mt/yr 
from a combined demonstrated resource of 6,139,000 mt ore 
as of January 1984. These mines are comparable in ore min- 
ing capacity to the Coeur d'Alene producers. Their silver 
grades, however, average nearly 61 pet lower. The Troy 
Mine, a large-scale underground mine developed in the late 



14 



Table 7.— Estimated mine and mill operating costs for the 10 
U.S. predominantly silver mines opened since 1969 

J . Mine operating cost Mill operating cost 

Range Wtd av Range Wtd av 

JANUARY 1984 DOLLARS PER METRIC TON ORE 

Underground: 

Small-scale $11.81-$39.14 $24.89 $9.84-$32.80 $21.26 

Large-scale W W W W 

Surface 4.11- 10.68 6.02 5.28- 11.23 7.63 

All mines 4.11-39.14 8.50 5.28-32.80 8.39 

JANUARY 1984 DOLLARS PER TROY OUNCE RECOVERABLE SILVER 

Underground: 

Small-scale $ 1.56-$10.88 $ 3.14 $2.24-$ 4.56 $2.68 

Large-scale W W W W 

Surface 2.80- 5.49 4.45 5.09- 5.88 5.65 

All mines 1.56-10.88 3.64 2.24- 5.88 3.59 

W Withheld to avoid disclosing company proprietary data; included in total. 



1970's, has an estimated ore capacity of 2,720,000 mt/yr and 
an estimated 1984 demonstrated resource of 32,670,000 mt 
ore. The three surface mines have an estimated combined 
ore capacity of 2,862,000 mt/yr and a combined 1984 
demonstrated resource of 35,060,000 mt ore. Estimated min- 
ing and milling operating costs for these 10 predominantly 
silver producers are presented in table 7. 

Table 7 provides two different measures of the variance 
in mining and milling operating costs for each of the three 
categories of mines. It shows the operating costs first in 
dollars per metric ton of ore, then in terms of dollars per 
troy ounce of recoverable silver. As shown, the weighted- 
average costs for both mining and milling, on a recovered- 
silver basis, are highest for the three surface mining opera- 
tions as a group. This is a reflection of the much lower silver 
grades at the three surface mines, which average only 42 
g/mt Ag. It is noted that only one of the six small-scale 
underground mines has an estimated mining cost per troy 
ounce of recovered silver that is higher than the average 
cost for the three surface mines. This mine has a relatively 
low silver grade, which results in a relatively high 
estimated operating cost on a recoverable-silver basis. 

In terms of processing, 5 of the 10 mines highlighted 
in table 7 use conventional flotation techniques to produce 
either a bulk concentrate or selective concentrates, which 
are then sent to smelters and refineries for extraction of 
the silver metal. The other five mines, including all three 
surface mines,use cyanide leaching (one heap leach and four 
conventional cyanide agitation leach operations) to extract 
the precious metals from the ore, with subsequent Merrill- 
Crowe deoxygenation-zinc dust precipitation and subse- 
quent smelting of the zinc dust precipitate with fluxes to 
produce a silver-gold dore. 

The five mines using flotation have two distinct advan- 
tages over the cyanide leaching operations. First, mill 
recoveries of silver are higher with flotation (84 to 91 pet, 
compared with 63 to 89 pet with cyanide leaching). Secondly, 
the use of flotation allows for the recovery of base metals 
(copper, lead, or zinc), which could be present in significant 
amounts, whereas the use of cyanidation allows only the 
payable recovery of gold (usually in minor amounts) alloyed 
with the silver. 

The cyanide leach operations do have advantages in that 
their products, dore bullion or zinc dust precipitate, are very 
low-volume, high-value products that can be air-freighted 
to many different precious metals refineries. This contrasts 
with the bulkier, lower value flotation concentrates, which 



are faced with more limited outlets for subsequent smelting 
and refining. 

It is estimated that the costs associated with transport, 
smelting, and refining of all products from the flotation 
mills accounted for between 11.1 and 29.1 pet of total 
operating costs (mining plus milling plus smelting, refin- 
ing, and transport), averaging 25.3 pet. In contrast, for 
cyanide leaching operations, the estimated costs for 
transportation and refining were estimated to account for 
only 3.6 to 8.6 pet of the total operating costs, averaging 
5.1 pet. 



UNDEVELOPED U.S. DEPOSITS 

A total of eight undeveloped deposits in the United 
States, estimated to contain a total of 107.3 million tr oz 
Ag, were identified and analyzed as predominantly silver 
deposits. These deposits are the Golden Zone deposit in 
Alaska, the Silver-Eiu*eka District in Arizona, the Revenue- 
Virginivis deposit in Colorado, the Big Hill deposit in Maine, 
the Flat Head and Butte District Zinc deposits in Montana, 
Ward Mountain in Nevada, and the Trixie Mine in Utah. 

Of the eight undeveloped U.S. predominantly silver 
deposits analyzed, three are proposed as surface mining 
operations and five as underground operations. Ore 
capacities for the surface mines would range from 315,000 
to 1,250,000 mt/yr, with an average of 685,000 mt/yr. Ore 
capacities of the underground mines would range from 
54,300 to 1,797,000 mt/yr, averaging 580,000 mt/yr. Min- 
ing costs are estimated to range from $4.24/mt to $8.39/mt 
for the three proposed surface mines and from $9.96/mt to 
$75.98/mt for the five proposed underground mines. 

In milling, three of the operations are proposed to re- 
quire a combination of cyanidation-flotation, and five are 
proposed to utilize flotation exclusively. The three 
cyanidation-flotation mills would have capacities ranging 
from 265,000 to 490,000 mt/yr and estimated milling costs 
of $14.68 to $35.70 per metric ton of ore. The five flotation 
mills are proposed to have a wide range of ore capacities 
from 54,300 to 1,797,000 mt/yr and milling costs ranging 
from as low as $3.12/mt to as high as $43.14/mt. 

In terms of commodities other than silver, four of the 
operations— including all three of the cyanidation-flotation 
mills— are estimated to have only one other payable com- 
modity, while two would have two additional payable com- 
modities and two— Big Hill and Ward Mountain— are 
estimated to have three to four additional payable 
commodities. 

As was the case for the producers, the transportation 
plus smelting and refining costs for the products from the 
mills that will use cyanidation to a high degree only rep- 
resent fi"om 1.8 to 7.4 pet of the total costs (mining plus mill- 
ing plus smelting, refining, and transportation), averaging 
5.0 pet. By comparison, the mills using flotation have 
transportation plus smelting and refining costs representing 
from 8.9 to 45.2 pet of the total costs, averaging 34.7 pet. 

In terms of the estimated required silver price for 
breakeven economics, the most promising undeveloped 
predominantly silver deposit is the Big Hill deposit in 
Maine. This deposit could be developed as a large-scale sur- 
face operation with significant potential coproduet revenues 
from lead and zinc. The Ward Mountain deposit, which con- 
tains significant amounts of zinc, copper, and lead and could 
be in production by 1987, is another possible future pro- 
ducer. Both of these deposits, which could be considered as 
"borderline" predominantly silver deposits, along with the 



15 



Green's Creek and Red Dog deposits in Alaska, and the 
Montana Tunnels project in Montana— all of which are true 
coproduct silver deposits— represent the most likely new 
sources of silver in the United States. All are representative 
of the so-called "polymetallic" deposits. These five deposits 
have the potential to add at least 9 million tr oz/yr of silver 
output to U.S. production if they are developed and operated 
at current design capacity. Red Dog and Green's Creek in 
particular are almost sure to be developed and are expected 
to reach full production sometime in the late 1980's. 

It should also be mentioned that exploration and per- 
mitting activity in 1984 indicates that two nearby proposed 
operations very similar in nature to the Troy, MT, opera- 
tion could be developed in the future. However, neither of 
these two properties was included in any aspect of this silver 
availability study. 

PRODUCERS IN MEXICO AND PERU 



Table 8.— Comparison of annual ore capacities between 

predominantly silver mines in Mexico and Peru, based on 

January 1984 data 

Annual ore Mexico Peru 

capacities 10^ mt/yr pet 10^ mt/yr pet 

By mine: 

Range 60-3,500 NAp 90-600 NAp 

Average 520 NAp 279 NAp 

By mining method: 
Underground: 

Cut and fill 1,135 15.6 2,065 74.2 

Shrinkage 1,705 23.4 90 3.2 

Caving 220 3.0 — — 

Open stope or sublevel stope . . 265 3.6 — — 

Subtotal 3,325 45.6 2,155 77.4 

Surface 3,960 54.4 630 22.6 

Total 7,285 100.0 2,785 100.0 

NAp Not applicable. 

— No value in category. 



The 14 producing mines in Mexico and the 10 in Peru 
evaluated as predominantly silver operations have total 
estimated demonstrated silver resources of 492.8 million 
and 172.9 million tr oz, respectively. The 14 mines in Mex- 
ico account for approximately 35 pet of the 1.4 billion tr oz 
Ag from the 66 evaluated predominantly silver mines and 
deposits, and the 10 in Peru account for 12.3 pet. 

The 14 Mexican predominantly silver mines represent 
approximately 28.4 million tr oz/yr of production capacity, 
or about 42 pet of Mexican silver production in 1984. In com- 
parison, the 10 Peruvian predominantly silver mines repre- 
sent about 15 million tr oz/yr of production capacity, or only 
about 27 pet of 1984 silver production in Peru. 

Comparisons between the operating characteristics of 
the producing predominantly silver mines in Mexico and 
Peru are presented in table 8. This table compares average 
individual mining capacities, by country, and compares an- 
nual ore capacities, by mining method, for the 14 Mexican 
and 10 Peruvian mines. 

As indicated, the Mexican mines have an average an- 
nual ore throughput that is 86.4 pet higher than the average 
for the 10 Peruvian mines. However, because the Peruvian 
silver grades average 38.1 pet higher (167.7 g/mt compared 
with 121.4 g/mt), silver production from the 14 Mexican 
mines averages only 35.3 pet higher than that from the 10 
Peruvian mines. 

Only 45.6 pet of the annual ore tonnage treated by the 
14 Mexican mines comes from underground operations, com- 
pared with 77.4 pet from the 10 Peruvian mines. Further- 
more, only 15.6 pet of the annual ore tonnage at the 14 Mex- 
ican producers comes from high-cost eut-and-fill under- 
ground mining methods, compared with 74.2 pet of the an- 
nual ore tonnage at the 10 producers in Peru. 

As a result of these differences (smaller capacities and 
a much higher percentage of high-cost mining methods), the 
Peruvian mines have estimated mine operating costs per 
metric ton of ore feed ranging from $4.68 to $75.67, and 
averaging $36.04. The equivalent estimates for the Mex- 
ican mines range from $4.84 to $39.41, averaging only 
$14.85. 

The ore in Peru mined by underground methods appears 
to occur in narrower veins than that in Mexico. This is in- 
dicated by the smaller mining widths, averaging 1.4 m, for 
the 5 underground primary silver mines in Peru using eut- 
and-fill shrinkage methods, compared with 2.4 m in com- 
parable Mexican underground operations. This difference 
is reflected in apparent average productivities at the eut- 



and-fill and shrinkage mining operations of 0.9 mt ore per 
worker-shift at the Peruvian mines compared with 1.7 at 
the Mexican operations. 

Of the 24 producing mines evaluated in Mexico and 
Peru, 22 were using bulk and/or selective flotation for ore 
benefieiation. One Mexican operation used only eyanida- 
tion (for producing silver-gold dore bullion), and another 
Mexican operation was sending approximately one-third of 
its ore to a selective lead-zinc flotation unit with the other 
two-thirds going to a eyanidation mill. 

The Mexican mills evaluated for this study have a much 
higher average milling capacity than the 10 Peruvian mills, 
with annual ore capacities ranging from 60,000 to 3,500,000 
mt/yr and an average throughput of 520,000 mt/yr in Mex- 
ico, compared with a range of from 90,000 to 600,000 mt/yr 
and an average of only 279,000 mt/yr in Peru. 

Estimated milling costs at the 14 Mexican operations 
ranged from $3.55/mt to $9.97/mt, averaging $4.81/mt. The 
estimated Peruvian milling costs ranged from $4.16 to 
$16.06, averaging $10.07. It appears that the lower oper- 
ating costs at the Mexican mills are due entirely to 
economies of scale rather than from any significant dif- 
ferences in complexities of the ore. For example, the 13 flota- 
tion mills in Mexico were producing a total of 23 different 
concentrates, compared with the 20 concentrates produced 
by the 10 mills in Peru. 

In terms of overall silver recoveries in benefieiation, the 
estimates for the 14 mills in Mexico ranged from 70.0 to 
95.3 pet, compared with 74.2 to 94.6 pet in Peru. 

Twelve of the 14 Mexican and all 10 of the Peruvian 
predominantly silver mines produce all of their silver con- 
tained in flotation concentrates. These concentrates must 
be transported to the appropriate smelters and refineries 
where the silver is refined to a final silver bullion in con- 
junction with the smelting and refining of the other base- 
metal commodities. 

The data on where the concentrates are smelted and 
refined reveal some significant differences between the 
silver industries of Mexico and Peru. 

In Peru, the La Oroya complex had a silver refining 
capacity of only about 25 million tr oz/yr in 1981, which, 
when compared with total mine production, indicates that 
a large quantity of Peru's total silver production is exported 
in concentrates to the United States, Europe, and Japan 
for further refining. In this study it was indicated that only 
3 of the 10 Peruvian predominantly silver producers were 
sending concentrates to the La Oroya complex, with 2 of 



16 



the 3 sending only a portion of their concentrates to La 
Oroya. It appears that the remaining concentrates were all 
being exported for further processing. Thus, it is further 
believed that most of the silver being produced at the La 
Oroya complex as of the early 1980's was contained in con- 
centrates shipped from the predominantly lead, zinc, and 
copper mines. 

In contrast, virtually all of the refined silver in Mexico 
is indicated to be produced at Mexican smelting-refining 
facilities, with only a small amount of silver in zinc con- 
centrate exported to the United States. In 1982, for exam- 
ple, the Torreon complex of Met-Mex Penoles was indicated 
to have a silver capacity of 34 million tr oz/yr and the lead 
smelter in Chihuahua and lead refinery at Monterrey of 
IMM (Industrias Minerales de Mexico) could produce about 
15 million tr oz/yr Ag. This total— 49 million tr oz of an- 
nual refining capacity— is very close to Mexico's total mine 
production of 52.9 million tr oz in 1981. For the Mexican 
predominantly silver mines, concentrates (including so- 
called "silver concentrates") from 9 of the 14 mines eval- 
uated were assumed to be sent either to the Torreon complex 
or to the smelter in Chihuahua and refinery in Monterrey. 
Copper concentrates from five of the evaluated mines, which 
comprised the next largest fraction of the silver, were 
assumed to be sent to the IMM copper complex in San Luis 
Potosi, while zinc concentrates from two of the evaluated 
mines were assumed to be sent either to the United States 
or to the Nueva Rosita zinc smelter. In addition, approx- 
imately 3 million tr oz Ag was estimated to be contained 
in the dore bullion produced annually at the two primary 
silver mines using cyanidation in whole or in part. 

Despite the fact that the majority of the Peruvian con- 
centrates were analyzed as being exported for smelting- 
refining and that one of the largest of the Mexican producers 
was using cyanidation for all of its silver production, the 
overall costs for transportation, smelting, and refining of 
the primary silver from the Peruvian and Mexican pro- 
ducers are very similar on a percentage of total cost basis. 
These costs, as a percentage of total costs (mining plus mill- 
ing plus smelting, refining, and transportation), range from 
9.4 to 34.7 pet for the 10 Peruvian producers, with a 
weighted average of 20.7 pet. For the 12 Mexican producers 
using only flotation and the one using flotation for a por- 
tion of its production, these costs ranged from 8.9 to 36.9 
pet, with a weighted average of 26.5 pet. Inclusion of the 
one major Mexican producer that uses cyanidation for all 
of its silver production lowers the weighted average to 21.2 
pet. 

OTHER MARKET ECONOMY COUNTRIES 

Producers 

In addition to the 38 producing mines in the United 
States, Mexico, and Peru, 15 producing predominantly 
silver mines in other countries were evaluated: Canada (6), 



Finland (2), Italy (1), Morocco (3), Spain (2), and Sweden (1). 
These 15 mines were estimated to account for about 10.9 
million tr oz/yr Ag output and contained an estimated 
demonstrated resource of 133.1 million tr oz Ag. These 15 
mines account for only 11.1 pet of the 1.2 billion tr oz Ag 
estimated to be present in all 53 of the evaluated produc- 
ing predominantly silver mines. 

Of these 15 producers, 4 had ore capacities in the 1 
million to 4 million mt/yr range; 3 ranged from 0.3 to 1 
million mt/yr; and 8 had ore capacities below 0.1 million 
mt/yr. Three of the seven larger mines are surface opera- 
tions and 4 are underground operations, with 1 in Canada 
and the other 6 all in Europe (2 in Spain, 2 in Finland, and 
1 each in Sweden and Italy). Of the eight smaller producers, 
only one is a combination surface-underground mining 
operation, and the rest are underground mines. Five of these 
small-scale primary silver mines are in Canada, and three 
are in Morocco. 

In terms of operating costs, the seven larger mines 
0300,000 mt/yr) had lower mine operating costs ($3.12/mt 
to $18.14/mt) than the small-scale mines ($13.53/mt to 
$166.09/mt). Similarly, milling costs for the larger opera- 
tions ranged from $2.47/mt to $9.51/mt ore, compared with 
$7.00 to $56.40 for the smaller operations. 

Only 3 of these 15 producers were indicated to be using 
cyanidation and then only as a complement to flotation. 
Only one was indicated to produce a fair amount of its total 
silver production in the form of dore bullion. Consequently, 
as a percentage of total costs (mining plus milling plus 
smelting, refining, and transportation), the costs for 
transportation, smelting, and refining are high for the 
overall group (8.4 to 46.6 pet, averaging 36.3 pet). 



Nonproducers 

Also included as predominantly silver deposits were four 
undeveloped foreign deposits— two (Abeourt-Barvue and 
Goldstream) in Canada, one (Berenguela) in Peru, and one 
(Black Mountain) in the Republic of South Africa. These 
four deposits contain an estimated 93.6 million tr oz Ag. 
One additional nonproducing deposit. La Argentiere in 
France, was a silver, lead, and zinc producer that shut down 
in 1982. 

The two undeveloped deposits in Canada are both pro- 
posed to be fairly large scale (350,000 to 500,000 mt/yr) 
underground operations. The Berenguela deposit is propos- 
ed to be a fairly large scale (1 million mt/yr) surface mine, 
and the Black Mountain deposit would be a very large scale 
(3,660,000 mt/yr) underground mine. All four would use 
flotation methods for beneficiation. Combined mining plus 
milling cost estimates for the four undeveloped deposits 
range from $26/mt to $29.13/mt. As a percentage of total 
costs (mining plus milling plus transportation, smelting and 
refining), the estimated costs for transportation, smelting, 
and refining range from 14.7 to 46.1 pet, averaging 26.0 pet. 



AVAILABILITY FROM PREDOMINANTLY SILVER PROPERTIES 



Each of the 66 predominantly silver properties was eval- 
uated using discounted-cash-flow rate of return (DCFROR) 
techniques to determine the constant-dollar long-run price 
of silver that would be required so that total revenues from 



silver and from all other payable coproducts and byproducts 
would be sufficient to cover all costs of production, dis- 
counted at a prespecified rate of return on all investments. 
An implicit assumption in the evaluation is that each mine 



17 



or deposit represents a separate corporate entity. The life 
of each property was determined by assuming that the 
operation would operate at 100 pet of mine capacity. The 
mine life covers only the demonstrated resource level. 

All capital investments incxu-red more than 15 years 
before the cost date (January 1984) of the analysis are 
treated as sunk costs. Investments incurred during the prior 
15 yr have the undepreciated balances entered as a capital 
investment in 1984. All subsequent investments, rein- 
vestments, operating costs, transportation costs, and 
smelting-refining costs are expressed in constant January 
1984 dollars. Investment and operating schedules are deter- 
mined as much as possible from published data, announced 
plans by the companies involved, or discussions with per- 
sonnel from the mining operations. For those deposits that 
have been explored, but where no plans to begin produc- 
tion have been announced, a development plan was as- 
sumed. The preproduction period for these explored deposits 
allows for the minimum engineering and development time 
necessary to begin production. Additional time lags and 
potential costs involved in filing environmental impact 
statements, receiving required permits, arranging financ- 
ing, etc., are not accounted for in the analysis but may be 
significant, particularly in the United States. 

Potential recoverable silver and the average total cost 
(or per troy ounce revenue requirement) determined over 
the life of the operation for each of the predominantly silver 
mines and deposits evaluated for this study have been ag- 
gregated into availability curves thatillustrate the poten- 
tial availability of silver at different cost levels. Availability 
curves are constructed as aggregations of the total amount 
of refined silver potentially available from each of the 
evaluated mines and deposits, ordered from those having 
the lowest average total cost to those having the highest. 
The total potential availability of silver (from predomi- 
nantly silver mines) can be estimated by comparing a pro- 
jected constant-dollar market price to the average total cost 
values shown on the availability curves. 

Total and annual availability curves were developed for 
the 53 producing mines evaluated as predominantly silver 
operations. Recoverable silver from the 121 mines and 
deposits evaluated as zinc operations, the 21 mines and 
deposits evaluated as lead operations, the 120 mines and 
deposits evaluated as copper operations, and the 108 mines 
and deposits evaluated as gold operations from prior studies 
is illustrated in total availability curves for each of these 
commodities. The reader can refer to the prior studies on 
lead and zinc, copper, and gold for the detailed availability 
and economics of the production of these commodities. 

As mentioned previously, the economic distinction be- 
tween a "predominant," "coproduct," and "byproduct" 
silver operation is often ambiguous and subject to change 
depending upon the relative prices of the commodities in- 
volved. Although in some cases the relative geologic abun- 
dance of the contained minerals makes this distinction evi- 
dent, in others (particularly lead-zinc-silver operations) the 
distinction is more ambiguous. It should be kept in mind 
that the criteria used to define a "predominantly silver" 
operation for this study were developed by the Bureau and 
provide but one definition for determining the relative im- 
portance of silver versus other recovered minerals for the 
purpose of long-run economic cost comparisons between 
silver operations and silver-producing countries. 

Figure 6 presents the 1984 constant-dollar long-term 
total cost and primary silver availability estimates for the 
14 U.S. producing mines relative to the 39 foreign pro- 



Fortign ' 
countrin 



lUnittdStatM 



r' 



2X 400 600 

RECOVERABLE SILVER. IO*tTM 



Figure 6.— Comparison of long-run total costs and available 
silver from 1 4 U.S. and 39 foreign predominantly silver producers. 



Table 9.— Long-term breakeven total cost estimates, 

predominantly silver producers, as of January 1984, by 

country^ 

Number of Cost, $/tr oz Total recoverable 
properties Ranged Wtd av silver, 1 Qs tr oz 

Mexico 14 $0-$14 $ 4.12 492.8 

United States 14 4-17 6.90 398.5 

Peru 10 6-17 10.64 172.9 

Other 9 0-35 6.35 78.2 

Canada 6 0-20 7.21 54.9 

Do2 (5) (10-20) (14.45) (27.3) 

Total or average . . 53 0-35 6.28 1,197.3 

''5 producers were detern^ined to have a long-term total cost associated 
with silver production. This means that there are no costs remaining to be 
covered by silver production after allowance for byproduct and coproduct 
credits. 

^Separate estimate calculated for 5 of the 6 evaluated Canadian operations. 
1 large operation, when included, lowers the weighted-average estimate to 
$7.21 /tr oz. This operation is currently a predominantly copper producer; 
around 1990 it should change to being a predominantly silver-zinc producer. 



ducers. The estimates were determined at the breakeven 
(0=pct) DCFROR level using January 1984 market prices 
for lead, zinc, copper, and gold of $0.25/lb, $0.49/lb, $0.69/lb, 
and $371/tr oz, respectively. 

Table 9 disaggregates the cost data of figure 6, by coun- 
try, into ranges and weighted averages. Mexico is the lowest 
cost source of silver production, with an average total cost 
(revenue requirement) of $4.12/tr oz Ag. The 14 U.S. pro- 
ducers on average require a long-term price of $6.90/tr oz 
(76 pet higher) in order to cover their average total cost at 
the breakeven level. It is noted that these 14 producers in- 
clude 11 of the top 13 U.S. silver producers of 1983. Five 
of the six Canadian mines had total cost estimates exceeding 
$10/tr oz, while only two U.S. and two Mexican operations 
had estimated total costs exceeding that level. The 10 Peru- 
vian operations have long-term total costs averaging 
$10.64/tr oz, or 54 pet higher than the those in the United 
States. Although the estimate is felt to be representative 
of predominantly silver producers in Peru as of 1984, this 
estimate is not representative of the cost of total silver pro- 
duction in Peru, since these 10 producers represented only 
27 pet of total 1984 production. 

Thirteen predominantly silver properties with a non- 
producing status as of January 1984 were also evaluated. 



18 



Of these properties, eight are in the United States, and the 
rest are in four foreign countries. Only two of the foreign 
nonproducers were determined to have long-term total costs 
below $20/tr oz. Three of the eight U.S. nonproducers have 
estimated long-term total costs per troy ounce below $10, 
three others have costs between $10 and $20, and the other 
two have costs in excess of $20. Given the current and near- 
term price outlook for silver, there is a low probability that 
the 10 nonproducing deposits with estimated long-term total 
costs exceeding $10/tr oz will be developed during the next 
few years. 

Table 10 disaggregates the long-term total cost and 
primary silver availability estimates of figure 6 by cost-price 
ranges. As shown, approximately 26 pet of the total primary 
silver from all producing operations is recoverable in a cost- 
price range of up to $3/tr oz. Of this total, 100 pet is a 
foreign-based resource. An additional 26 pet of total silver 
is recoverable in a cost-price range of $3.01 to $6.00, 50 pet 
of which represents a U.S. resource. Fully 80 pet of the total 
silver is recoverable in a cost-price range of up to $9/tr oz, 
with U.S. deposits totaling one-third of this silver. Of the 
total silver available at estimated costs exceeding $12/tr 
oz, 99 pet is from foreign mines. 

Table 11 presents the same data for wider cost-price 
ranges and demonstrates that a majority (75 pet) of the 
primary silver in the predominantly silver mines available 
at cost-price levels below $6 per troy ounce is a foreign-based 
resource. With the price of silver below $7.50 since the third 
quarter of 1984 and trending down below $6 early in 1985, 
the indication is that most U.S. predominantly silver pro- 
ducers are increasingly unable to recover their long-term 
total breakeven production costs and are suffering a long- 
term profitability squeeze. 

It is important to analyze why 75 pet of the total primary 
silver available at cost-price levels below $6/tr oz is a 
foreign-based resource. The following section discusses the 
effect that the declining value of foreign currencies has had 
on the determination of foreign production costs in terms 



Table 10.— Percentage distribution, by cost or price range, 

of total available silver from U.S. and foreign predominantly 

silver producers, as of 1984 

Total avail- Available silver 

Cost or price range, able silver within range, pet 

$/tr oz in range. Pet of 

1 06 tr oz •o'^l United States Foreign 

$3 INCREMENTS IN RANGE 

to $ 3.00 314.3 26 100 

$ 3.01 to $ 6.00 315.2 26 50 50 

$ 6.01 to $ 9.00 339.4 28 58 42 

$ 9.01 to $12.00 132.1 11 33 67 

$12.01 to $15.00 43.9 4 100 

$15.01 to $18.00 41.9 4 2 98 

Over $18.00 10.5 1 100 

Total silver 
or pet share 1,197.3 100 33 67 

$6 INCREMENTS IN RANGE 

to $ 6.00 629.4 52.5 25 75 

$ 6.01 to $12.00 471.5 39.5 51 49 

Over $12.00 96.4 8.0 1 99 

Total silver 
or pet share 1,197.3 100 33 67 



Table 1 1 .—Percentage distribution by cost or price range, of 
total available silver from foreign predominantly silver pro- 
ducers, for 1982 and 1984 (supporting data for figure 8) 



Cost or priee range, 
$/tr oz 



1982, pet 



1984, pet 



In range Cumula- 
tive 



In range Cumula- 
tive 



Cumulative 

silver (1984) 

106 tr oz 



to $ 3.00 


17 


17 


39 


39 


314.3 


$ 3.01 to $ 6.00 . 


24 


41 


19.5 


58.5 


470.6 


$ 6.01 to $ 9.00 . 


22 


63 


18 


76.5 


614.7 


$ 9.01 to $12.00 . 


21 


84 


11 


87.5 


703.1 


$12.01 to $15.00 . 


2 


86 


5.5 


93 


747.0 


$15.01 to $18.00 . 


2 


89 


5 


98 


788.3 


$18.01 to $21.00 . 


5 


94 


1 


99 


798.5 


Over $21 .00 


6 


100 


1 


100 


798.8 



of the U.S. dollar, and demonstrates the increasing com- 
petitive advantage that this has bestowed upon some foreign 
producers relative to U.S. producers. 



EFFECT OF EXCHANGE RATE VARIATIONS 



Since the early 1970's, there has been a large divergence 
in the relative inflation rates of nations. This is particularly 
evident when comparing the so-called "developed" countries 
of Western Europe and North America to the so-called 
"developing" countries of Latin America, Africa, and Asia. 
This divergence of relative rates of inflation, along with 
other factors, has resulted in a divergence in the relative 
value of national currencies. 

Since 1975, the volatility of the international exchange 
rate system has increased. In particular, the value of most 
national currencies of developing countries has declined 
(devalued) significantly relative to the U.S. dollar. Figure 
7 presents exchange rate data for Canada, Mexico, and Peru 
relative to the U.S. dollgir. The data in figure 7 are presented 
in index form so that the value of a nation's currency in 
any year can be compared to its value in 1975, relative to 
the U.S. dollar. For example, the value of the Canadian 
dollar in 1984 had only 76.8 pet of the value of the Cana- 
dian dollar in 1975 relative to the U.S. dollar. Similarly, 
the value of the Peruvian sol in 1984 had only 1.5 pet of 
the value that it represented in 1975. 

The effect of these currency devaluations upon the deter- 



mination of long-term total production costs, as measured 
in terms of the U.S. dollar, has been significant. Consider 
the example of a silver producer in Mexico (whose costs are 
primarily denominated in pesos) that sells to consumers in 
the United States in return for U.S. dollars. The dollars are 
then converted back to pesos at the current exchange rate 
and used to cover all expenses incvirred in the production 
of silver; what is left over is called profit. Since the rate 
at which mining costs have increased has not kept pace with 
the rate at which the Mexican peso has been devaluing, a 
significant portion of this profit can be the difference be- 
tween the value of Mexican pesos and the value of U.S. 
dollars as dictated by foreign exchange rates. In fact, this 
producer could be a very high cost operation in terms of its 
own currency, but if the silver is sold for dollars that then 
purchase many more units of local currency than were ex- 
pended in the production process, this producer can be 
highly profitable. 

This has indeed been the case in many (but not all) coun- 
tries that produce and sell silver (and other mineral prod- 
ucts) to the United States or that sell their silver for U.S. 
dollars. Thus, the situation can arise whereby silver pro- 



19 



i.2| 1 1 r 



.8 



11 

in 

S .6 

X 

UJ 

o 

z 



.2 



1 1 1 1 1 r 



T r 






United States 



\ 
\ 



Canada 



\ *• 

\ 
\ 



Mexico 



J. 



I 



_L 



_L 



X Peru 



JL 



± 



■ ■ 



1970 



1975 1980 

Figure 7.— Index of exchange rates: United States, Canada, {Mexico, and Peru. 



1985 



duced in Mexico is "lower priced" or "lower cost" than silver 
produced in a country such as Canada whose currency has 
not devalued by as large an amount relative to the U.S. 
dollar. This phenomenon is hereafter referred to as a 
"foreign exchange bias." 

Given this situation, an availability analysis that at- 
tempts to relate some measure of long-term total produc- 
tion cost to the total amount of primary silver that is 
available from each operation and/or country is subject to 
a serious problem of relative cost interpretation. How do 
we know unambiguously that Peruvian or Mexican silver 
producers are indeed lower cost (rather than just lower 
priced) operations relative to Canadian or U.S. producers 
at any given point in time? 

To demonstrate the importance of this effect, the long- 
term total cost estimates were calculated in terms of con- 
stant January 1982 dolleirs. These cost estimates were then 
compared with those calculated in terms of constant 
January 1984 dollars. This allows for the quantification of 
the foreign exchange bias in terms of its impact through 
time. 

This analysis indicates to what extent a nation's rate 
of inflation (the ultimate measure of long-term relative cost) 
is being offset by the devaluation of its cmrency, thus mak- 
ing its production costs and required sales prices appear ar- 
tificially low. 

Figures 8 and 9 and table 11 present the results of this 
analysis. Figiure 8 presents the total availability curves for 
the 39 foreign predominantly silver producers determined 



in terms of both constant 1982 and 1984 U.S. dollars. It 
demonstrates a significant downward shift in the 1984 
availability curve for cost-price levels less than $12/tr oz. 
Of the 28 operations in this cost-price range, 20 are located 
in Mexico or Peru and only 1 in Canada. 

In the case of Mexico, the weighted-average breakeven 
cost estimate declined by nearly 40 pet (or $2.60/tr oz) over 
this period despite a decline in the market prices of 
byproduct lead (26 pet), copper (11.5 pet), and gold (3.4 pet). 
All other factors being equal, these price declines, coupled 
with annual production cost increases, should have resulted 
in an increase in the breakeven cost-price level. But these 
negative factors were more than offset by the devaluation 
of the Mexican peso relative to the U.S. dollar over this 2-yr 
period. In addition, the market price of zinc rose over this 
period by 19.5 pet, and as a result, those operations produc- 
ing zinc demonstrated the largest declines in the breakeven 
cost-price level. 

In Canada, the rate of increase in production cost ex- 
ceeded the rate of devaluation and this, coupled with lower 
prices for the associated coproducts and byproducts, resulted 
in a 7.5-pet increase in the U.S. -dollar-based weighted- 
average cost. The increase in weighted-average cost for the 
previously defined subset (see table 9) of five of the six Cana- 
dian operations shows an even higher 20-pet increase. All 
five of these producers have total cost estimates exceeding 
$10/tr oz and are small-scale underground mining opera- 
tions; only one produces small quantities of byproduct zinc. 

In Peru, the very rapid rate of inflation and declining 



20 



50 



40 



-w- 



o 
o 



30 



^ 20 
p 



10 



19841 



r- 









'J- 



, 1 

I 



prf::^-^ 



I 



1982 



900 



300 600 

RECOVERABLE SILVER, lO^troz 
Figure 8.— Long-run total cost and available silver from 39 foreign predominantly silver producers, 1982 versus 1984 



40 



30 



O 



a: 

UJ 
CO 



20 



10 



Cost, $/lT oz 



■T \ r- 



■T \ ^ 



■> \ r 



J L 



\ 



\ 



48.00 (Jan. I982J 



\ $8.00 (Jon. 1984) 
V 



^ ^ J4.OO ( Jon. 1984) 



$4.00 (Jan. 1982) 



J \ \ \ \ \ L 



1984 



1986 



1988 



1990 



1992 



1994 



1996 



1998 



2000 



Figure 9.— Potential annual silver production from 39 foreign predominantly silver producers at selected constant dollar- 
cost-price levels, 1982 versus 1984. 



21 



byproduct prices were both offset by an almost equally rapid 
rate of devaluation that resulted in the weighted-average 
total cost estimate remaining essentially the same. 

Table 11 demonstrates the overall impact of these 
various cost changes by detailing the shift in the amount 
of total silver available within different cost-price ranges. 
The amount of silver available in the $3/tr oz cost-price 
range increased from 17 pet of the total in 1982 to 39 pet 
in 1984, primarily because of a significant decline in Mex- 
ican long-term costs. Similarly, the cumulative amount of 
silver available in the up to $6/tr oz range increased from 
41 to 58.5 pet. 

The implications of this analysis are twofold. First, the 
large and discrete devaluation of the Mexican peso has 
resulted in a significant decline in U.S. dollar-based costs 
(per troy ounce revenue requirements), which has enhanced 
the competitive position of Mexican silver producers relative 
to those in the United States and Canada. Second, the total 



amount of silver recoverable in a cost-price range of up to 
$6/tr oz has increased significant . This should have the 
effect of helping to depress silver prices. 

An indication of this is given in figure 9, which depicts 
annual potential production curves for cost-price levels per 
troy ounce of $4 and $8 determined in terms of 1982 and 
1984 constant dollars. As shown, the amount of annual pro- 
duction potential at a cost-price level of up to $4 has nearly 
doubled. It must be emphasized that this analysis has looked 
only at foreign predominantly silver producers, as defined. 
These 39 foreign producers clearly demonstrate the 
economics of silver production at predominantly silver 
deposits, yet they represented only 17 pet of total MEC 
silver production in 1984. With U.S. dollar-based costs in 
many foreign countries declining further due to devalua- 
tion, the outlook for U.S. dollar-based silver prices is one 
of continued weakness. 



AVAILABILITY OF BYPRODUCT AND COPRODUCT SILVER 



Detailed availability and economic analyses of silver 
from copper, zinc, lead, and gold deposits in MEC's are 
beyond the scope of this study, which focuses on the 
availability of silver from predominantly silver deposits.* 
However, since 76.5 pet of the estimated recoverable silver 
in demonstrated resources is from these other types of 
deposits, a general, updated availability section for the 
availability of silver from zinc, lead, copper, and gold 
deposits follows. 

PREDOMINANTLY ZINC 

The 85 producing mines and 36 nonprodueing deposits 
evaluated as predominantly zinc operations can potentially 
produce 2.63 billion tr oz of byproduct or coproduct silver, 
of which 1.66 billion tr oz is from the producing operations. 
As shown in figure 10, a total of 2.51 billion tr oz Ag is 
potentially recoverable from 111 zinc mines and deposits 
at average total costs of zinc production ranging from 
$0.00/lb to $1.00/lb. Slightly over 116 million tr oz Ag poten- 
tially available from the remaining 10 properties, with 
average total zinc production costs of over $1.00/lb, are not 
shown on the curve. 

The estimated average total cost of zinc production 
equals $0.00 for nine operations that have a total poten- 
tial production of 152 million tr oz Ag. This situation ap- 
pears in cases where revenues from byproducts and 
coproducts are able to cover total production costs (which 
are burdened against the predominant product in the 
analysis). This situation exemplifies the complexity of zinc 
and lead ores and underscores the effect that byproduct and 
coproduct values can have on a mining operation. 

About 796 million tr oz (30.3 pet of the total of 2.63 
billion tr oz) is estimated to be recoverable at average total 
zinc production costs of under $0.20/lb. Slightly under 500 
million tr oz (19.0 pet) is estimated to be recoverable at costs 
ranging between $0.21Ab and $0.40/lb; 916 million tr oz 
(34.9 pet) at costs ranging from $0.41/lb to $0.60/lb; and 414 
million tr oz (15.8 pet) at £Osts over $0.60/lb."' 



PREDOMINANTLY LEAD 

Figure 11 illustrates estimated total recoverable silver 
from the 21 mines and deposits evaluated as predominantly 
lead operations. As shown on the curve, a total of 244.8 
million tr oz (99.9 pet of the total of 244.9 million tr oz) is 
potentially recoverable from 20 mines and deposits with 
average total costs of lead production ranging from $0.02/lb 
to $0.50/lb. The remaining 78,000 tr oz, from one deposit 
with an average total cost of lead production above $0.50/lb, 
is not shown on the curve. Approximately 33.6 million tr 
oz Ag (13.7 pet of the total) is estimated to be recoverable 
at average total costs of under $0.15/lb Pb. At costs rang- 
ing between $0.16/lb and $0.25/lb Pb, 119.3 million tr oz 
Ag (48.7 pet) is potentially available; and at costs ranging 
between $0.26/lb and $0.50/lb Pb, 91.9 million tr oz Ag (37.5 
pet) is potentially recoverable." 

PREDOMINANTLY COPPER 

The 80 producing mines and 40 nonprodueing deposits 
evaluated as predominantly copper operations can poten- 
tially produce 1.59 billion tr oz of byproduct silver, of which 
982 million tr oz is contained in the producing operations. 
As shown in figure 12, a total of 1.49 billion tr oz Ag is 
potentially recoverable from 102 copper mines and deposits, 
with average total costs of copper production ranging from 
$0.00/lb to $1.50/lb Cu. The remaining 97.1 million tr oz 
Ag, from 18 mines and deposits with estimated production 
costs above $1.50/lb, is not shown on the curve. 

At costs ranging between $0.00/lb and $0.40/lb Cu, 270.6 
million tr oz Ag (17.1 pet of the total 1.59 billion tr oz) is 
potentially recoverable. Another 133.4 million tr oz Ag (8.4 
pet) is potentially recoverable at costs between $0.41/lb and 
$0.60/lb Cu; 464.4 million tr oz (29.3 pet) at costs between 
$0.61/lb and $0.80/lb Cu; 71.7 million tr oz (4.5 pet) at costs 
between $0.81/lb and $1.00Ab Cu; and 646.3 million tr oz 
(40.7 pet) at costs above $1.00/lb Cu.'^" 



"See IC's 8809 and 8930 (copper), 8962 and 9026 (lead and zinc), and 9070 
(gold) for details on the availability and economics of the.se commodities. 

'"Average total cost of zinc determined at January 1984 costs and given 
prices for lead at $0.25/lb, copper at $0.69/lb, silver at $8.18/tr oz, and gold 
at $371/tr oz. 



"Average total cost of lead determined at January 1984 costs and given 
prices for zinc at $0.49/lb, copper at $0.69/lb, silver at $8.18/tr oz, and gold 
at $371/tr oz. 

'"Average total cost of copper determined at January 1984 costs and given 
prices for lead at $0.25/lb, zinc at $0.49/lb, silver at $8.18/tr oz, and gold 
at $371/tr oz. 



22 




0.5 1.0 1.5 2.0 

TOTAL RECOVERABLE SILVER, lO^troz 
Figure 10.— Total recoverable silver from zinc mines and deposits in market economy countries. 



2.5 



0.50 



1 j: 



.40- 






3^ 30 



5 .20 

O 
< 
UJ 



.10 







I r 



_L 



1 1 1 r 



1 r 



_L 



X 



J_ 



X 



-L 



X 



X 



X 



20 



40 



220 



60 80 100 120 140 160 180 200 

TOTAL RECOVERABLE SILVER, lO^troz 
Figure 11.— Total recoverable silver from lead mines and deposits in market economy countries. 



240 260 



23 



1.60 



1.20- 



00 



o 
o 



a: 
ui 

Q. 

o 
o 




0.2 



1.4 



0.4 0.6 0.8 1.0 1.2 

TOTAL RECOVERABLE SILVER, lO^troz 
Figure 12.— Total recoverable silver from copper mines and deposits in market economy countries. 



i:6 



PREDOMINANTLY GOLD 

The 104 producing and 4 undeveloped operations 
evaluated as predominantly gold operations can potentially 
produce 120.2 million tr oz of byproduct silver, of which 
116.2 million tr oz (96.7 pet) is from the producing mines. 
As shown in figure 13, a total of 115 million tr oz Ag is 
potentially recoverable from 93 gold mines and deposits 
with average total costs of gold production ranging from 
$35 to $500 per troy ounce of gold. 

The remaining 5.2 million tr oz Ag from 15 properties 
with average total costs above $500/tr oz Au, is not shown 
on the curve. Approximately 27.9 million tr oz Ag (23.2 pet 
of the total) is estimated to be recoverable at average total 
gold production costs per troy ounce of under $200. Another 
74.8 million tr oz (62.2 pet) is potentially recoverable at gold 
costs between $201 and $400; 12.3 million tr oz Ag (10.2 
pet) at gold costs between $401 and $500; and 5.2 million 
tr oz Ag (4.4 pet) at gold costs above $500." 



SUMMARY 

As a summary of total availability, figiu-e 14 illustrates 



'^Average total cost of gold determined at January 1984 costs and given 
prices for lead at $0.25/lb, zinc at $0.49/lb, copper at $0.69/lb, and silver at 
$8.18/tr oz. 



the relative percentages, by country, of silver from 
predominantly zinc, lead, copper, and gold deposits as well 
as the combination of all five of the individual classifica- 
tions used in this report. The recoverable amounts shown 
in figure 14 were also presented in table 4. The United 
States, with 1.32 billion tr oz, contains the largest amount 
of silver from all evaluated sources (22.1 pet), followed by 
Mexico with 1.08 billion tr oz (18.0 pet), Canada with 971.3 
million tr oz (16.2 pet), Australia with 716.8 million tr oz 
(12.0 pet), and Peru with 604.3 million tr oz (10.1 pet). 
However, from the total contained 1984 silver resources 
shown in table 3, only 56.3 pet of the U.S. resource is from 
producing mines, compared with 95.5 pet of the contained 
resources in Mexico, 70.7 pet in Canada, and 62.6 pet in 
Peru. 

Of the major silver producers, the United States has the 
lowest percentage of demonstrated silver resources in 
predominantly silver and in predominantly lead and zinc 
deposits. Approximately 65.9 pet of the total U.S. recover- 
able resource is from these three categories, compared with 
84.3 pet in Mexico, 71.8 pet in Canada, 69.4 pet in Peru, 
and 97.8 pet in Australia (all from lead and zinc deposits). 
About 33.2 pet of the U.S. recoverable resource is in 
predominantly copper deposits, which, given the current 
state of the U.S. copper industry, makes much of this 
resource uneconomic at present. As for silver in zinc 
deposits, a detailed analysis of long-run average total costs 
of potential zinc metal production from predominantly zinc 



24 



500 




40 60 80 

TOTAL RECOVERABLE SILVER, lO^troz 
Figure 13.— Total recoverable silver from gold mines and deposits in market economy countries. 



120 



mines and deposits in IC 9026 (10, p. 35) concludes that the 
lowest cost source of zinc from producing mines in major 
producing countries is Mexico (with an average cost of 
$0.16/lb Zn in 1981 dollars), followed by Australia ($0.20/lb 
Zn), and Peru ($0.35/lb Zn). The average cost of zinc from 
producing mines in the United States equalled $0.58/lb in 
January 1981 dollars. 

On an annual basis, the 339 properties evaluated as pro- 
ducing mines have an estimated total annual output ca- 
pacity of 266.8 million tr oz Ag (table 12) compared with 
reported 1984 MEC mine production of 316.6 million tr oz. 
Thus, the estimated annual capacity of the analyzed pro- 
ducers equals 84.3 pet of the reported 1984 MEC produc- 
tion. The countries with the largest differences between the 
capacity estimated by the Bureau and reported production 
are summarized below. 

1. Reported production from Peru in 1984 was 18.5 mil- 
lion tr oz larger than the Bureau's capacity estimate. One 
major reason is that about 8 million tr oz was produced in 
1984 from new operations developed since 1982 and not in- 
cluded in this study's evaluations for silver, lead, or zinc. 



Table 12.— Annual ore tonnage and annual silver capacities, 

by deposit type and status, for mines and deposits in marltet 

economy countries 



Predominant 

commodity deposit 

type 



Ore tonnage, 
103 mt/yr 



Silver capacity, 
103 tr oz/yr 



Producing Nonproducing Producing Nonproducing 
mines deposits mines deposits 



Zinc 52,025 

Silver 27,513 

Copper 573,087 

Lead 15,678 

Gold 222,567 

Total 890,870 



40,246 

11,041 

299,167 

985 

3,573 



115,015 

82,377 

47,851 

15,495 

6,066 



43,596 

14,579 

20,999 

1,842 

198 



355,012 266,804 



81,214 



In addition, the predominantly silver operations evaluated 
in this study have increased their overall production ca- 
pacity by about 5 million tr oz over estimates of this 
analysis. Also, Southern Peru Copper Corp. (Toquepala and 
Cuajone Mines) reported 1984 silver production of over 2 
million tr oz. At the time of the Bureau's copper study, the 
silver grades for these two operations were not available 
and, hence, not estimated for the original copper analysis. 
Finally, about 2.5 million tr oz Ag was produced in 1984 
from small mines not included in the analysis. 

2. In Japan 10 million tr oz Ag were produced in 1984; 
much of this production was probably as a byproduct of the 
smelting and refining of imported concentrates. 

3. This study has only included demonstrated resources 
of silver in copper ores at Codelco's operations in Chile. It 
is estimated that in 1984 approximately 6 million tr oz Ag 
was produced in Chile from non-Codelco copper operations 
and from other small producers that do not report silver 
grades. 

4. In Bolivia, production of about 4.9 million tr oz Ag 
was reported in 1984, much of this probably as a byproduct 
of tin, tungsten, and gold operations. 

The above differences reflect essentially (1) expansions 
and new developments occurring in Peru from 1981-83, (2) 
lack of data on silver grades and production from some ma- 
jor copper operations, (3) an unspecified amount of reported 
MEC production that derives from the smelting and refin- 
ing of imported concentrates, and (4) silver production from 
small producers not included in the analysis. 

Regarding this last point, the Bureau's criteria for 
deposit evaluation precludes the inclusion of all of the minor 
silver producers in MEC's. The size of these minor producers 
should not have a significant impact on the average cost 
data presented in this report on a country basis or on the 
relative availability of resources. 



25 




All properties 
(Including predominantly silver) 



Zinc properties 
Figure l4.-Dl8trlbutlon of recoverable silver, by country, as of January 1984 



26 



SUMMARY AND CONCLUSIONS 



DEMONSTRATED SILVER RESOURCES 

This study estimates a total of 5.99 billion tr oz Ag to 
be contained in 436 mines and deposits as of January 1984. 
In terms of classification by the predominant commodity 
of each deposit, there were 66 deposits classified as 
predominantly silver properties, 142 classified as lead and 
zinc properties, 120 as copper properties, and 108 classified 
as gold properties. Of the 436 mines and deposits included 
in this study, 339 were estimated to be in production as of 
January 1984, 7 were in development, and 90 were 
undeveloped or past producing deposits. 

Using these classifications, the total recoverable 
demonstrated silver resource cited above breaks down as 
shown in Table 13. 

Several caveats to the above resource estimates must 
be made to place MEC silver resources in the proper 
perspective: 

1. The type of resource data reported. 

2. The type of resource occurrence that accounts for pro- 
duction in an individual country. 

3. The impossibility of evaluating all of the small silver- 
producing mines in MEC's, which by themselves are in- 
significant but in the aggregate could be an important 
source of silver production for an individual country. 

4. The static nature of resource estimates in this type 
of study. 

The type of resource data reported often veiry not only 
because of government policies but also because of a reluc- 
tance on the part of many mining companies to divulge data 
on their mining operations. This is due to a number of fac- 
tors, among them the desire to minimize or avoid taxation 
in countries that tax the value of unmined mineral 
resources. Also, most publicly held mining companies are 
required to annually report their reserves (as opposed to 
resources) to various institutions. For valid reasons, these 
annual reported reserves are usually defined as that ore 
which h£is been developed on at least three sides and 
assayed as thoroughly as required. These "proven reserves" 
are redefined each year based on production, new develop- 
ment, new assays, changes in prices and costs and, possibly, 
changes in technology. These proven reserves are justifiably 
conservative due to the above reasons, as well as to the fact 
that many vein-type silver mines are geologically erratic, 
which makes reasonable inferences of resources difficult or 
perhaps impossible. Also, exploration work to delineate 
resources is a costly and time-consuming endeavor and will 
not be done by small operators or poor countries, or perhaps 
even large operators that have been in production for a long 
time. Many mining operations will not estimate beyond the 
proven reserve level without a very good reason, such as 
plans for major capital investments. 

The largest and best established areas generally have 
the best estimation and reporting. Those countries or areas 
with geological occurrences that lend themselves relatively 
easily to estimation have the best available data in terms 
of quality and quantity. Basically, the key to ascertaining 
world demonstrated silver resources is to know were it has 
not been measured or reported in addition to knowing where 
it has been measured and reported. This study, by neces- 
sity, deals only with countries and areas where enough basic 
deposit information is collected and reported so that it is 
possible to estimate demonstrated resources with a reason- 
able degree of confidence. As a result, almost two-thirds of 



1.41 


23.5 


2.63 


43.9 


.24 


4.1 


1.59 


26.5 


.12 


2.0 



Table 13.— Summary of total recoverable demonstrated silver 
resources, by deposit classification 

Deposit classification lOM^oz 'total 

Predominantly silver 

Predominantly zinc 

Predominantly lead 

Predominantly copper 

Predominantly gold 

Total 5.99 100.0 



the recoverable resource estimated for this report is con- 
tained in producing mines and two-thirds of the undeveloped 
deposits included in the analysis for this study are located 
in the United States, Canada, and Australia. The two 
largest silver producers, Mexico and Peru, most likely are 
underrepresented in the explored deposit category. 

This study deals also with a very large number of prop- 
erties where silver is a byproduct of gold, lead, zinc, and 
copper production. In many of these operations, no data on 
silver resources are estimated or reported because of the 
insignificance of silver to the economics of the operation or 
the operator's inability to estimate the amount of silver con- 
tained within the overall demonstrated resource tonnage. 
This is especially so because the occurrence of silver can 
be very erratic within that resource tonnage itself. 

The resource tonnage estimates for this study are de- 
rived solely from the 436 evaluated mines and deposits. 
Thus, the resource estimates exclude the resources of a large 
number of very small silver producers, which may account 
for as much as 15 pet of annual silver production in MEC's. 

In addition, the resource estimates for this study reflect 
demonstrated resource estimates circa 1980-82 minus 
estimated production fi-om producing mines for the interven- 
ing years to January 1984. This implies that no new 
reserves or demonstrated resources have been added to 
replace that production, an implication that is highly 
unlikely. For all these reasons, the demonstrated resource 
estimates of this study must be considered conservative. 



AVAILABILITY ANALYSIS 
Predominantly Silver Mines and Deposits 

The sole criterion for inclusion of a deposit in the 
predominantly silver category was that all silver-bearing 
mines and deposits with grades of 3.5 pet or less combined 
lead plus zinc were essentially predominantly silver prop- 
erties. Even with this classification system, 5 of the 66 
predominantly silver deposits had breakeven silver price 
determinations of $0.00/tr oz, indicating that commodities 
such as lead, zinc, copper, and gold provide sufficient 
revenues to cover the total cost of production as of January 
1984. 

Mexico was shown to have the lowest long-term total 
production costs and the largest amount of silver available 
from producing predominantly silver mines. Although the 
United States was shown to possess a significant amount 
of available silver in predominantly silver producers at 
relatively competitive long-term production costs, this com- 
petitive position was shown to have eroded in recent years 
owing to the currency devaluations of many mineral- 



27 



producing countries, which has reduced dollar-denominated 
foreign production costs. In particular, Mexican 
predominantly silver producers were shown to have ex- 
perienced significant dollar-denominated production cost 
decreases. 

The relatively unfavorable economic position of the U.S. 
predominantly silver producers may explain why the two 
major U.S. deposits now close to initial development 
(Green's Creek and Red Dog), and a third deposit that is 
likely to be developed (Montana Tunnels), are all essentially 
coproduct silver deposits. The Big Hill deposit in Maine is 
a "borderline" coproduct deposit that could likely be 
developed, as is the Ward Mountain deposit in Nevada, 
which could see development given silver prices somewhat 
higher than at present. In addition, the Cabinet Wilderness 
area of Montana, which is adjacent to the relatively low- 
cost Troy mine (also a "borderline" coproduct deposit), is 
undergoing exploration activity to determine the potential 
of this copper-silver resource and could possibly result in 
two new operations similar in size to the Troy mine. 

Byproduct and Coproduct Silver Mines 
and Deposits 

An estimated 76.5 pet of the total recoverable silver in 
the analyzed demonstrated resource is contained in mines 
or deposits that can be classified as predominantly zinc, 
predominantly lead, predominantly copper, or predomi- 
nantly gold. With an estimated recoverable resource of 2.63 
billion tr oz, the properties evaluated as predominantly zinc 
deposits are the largest source (43.9 pet) of the potential 



silver available from MEC's. In many cases, particularly 
in Mexico, Peru, and Australia, the high grades of b5T)roduct 
silver have an important impact upon the profitability of 
the mining operation (10, p. 38). For example, nine opera- 
tions evaluated as predominantly zinc producers had an 
estimated average total cost of zinc production equaling 
$0.00, indicating that revenues from silver and other 
coproducts or byproducts are sufficient to cover the total 
costs of production. However, it should be noted that this 
is the case for only 9 of the 121 zinc properties included in 
the analysis. Excluding the Missouri mines, which have low 
silver grades, the economic impact of byproduct silver is 
similar for the properties evaluated as primary lead 
deposits, although revenues from silver and other 
byproducts were not sufficient to provide an average total 
lead production cost of $0.00 at any of the 21 properties 
evaluated. 

Copper mines are the second most important source of 
potential silver; however, it should be noted that this 
category has the largest percentage of the silver contained 
in nonproducing deposits. Silver grades in these deposits 
generally tend to be low (2.3 g/mt on average) and except 
for a few extreme cases, silver does not have a significant 
influence upon the overall economics. Gold properties are 
the least important source of potential silver of the five 
classifications of deposits evaluated. Byproduct silver grades 
in the gold properties show a wide range, but, on average, 
are an order-of-magnitude lower than the silver grades in 
the evaluated copper deposits and tend to be too low to 
significantly impact the overall economics of the primary 
gold operations. 



REFERENCES 



1. U.S. Biu-eau of Mines and U.S. Geological Survey. Principles 
of a Resource/Reserve Classification for Minerals. U.S. Geol. Surv. 
Circ. 831, 1980, 5 pp. 

2. Ryan, J. P. Silver. Ch. in BuMines Minerals Yearbook 1963, 
V. 1, pp. 1001-1024. 

3. . Silver. Ch. in BuMines Minerals Yearbook 1968, 

V. 1-2, pp. 1003-1018. 

4. Drake, H. J. Silver, Ch. in BuMines Minerals Yearbook 
1978-79, v. 1, pp. 801-820. 

5. . Silver. Ch. in BuMines Minerals Yearbook, 1980, 

V. 1, pp. 731-745. 

6. Reese, R. G., Jr. Silver. Ch. in BuMines Minerals Yearbook, 
1984, v. 1, pp. 809-826. 

7. .Silver. Ch. in BuMines Minerals Yearbook, 1983, v. 1, 

pp. 763-779. 



8. Bell, J. E., and K. M. McBreen. Silver. Ch. in BuMines 
Minerals Yearbook 1953, v. 1, pp. 1007-1025. 

9. Heyl, A. V., W. E. Hall, A. E. Weissenborn, H. K. Stager, 
W. P. Puffer, and B. L. Reed. Silver. Ch. in United States Mineral 
Resources. U.S. Geol. Surv. Prof. Paper 820, 1973, pp. 581-603. 

10. Peterson, G. R., K. E. Porter, and A. A. Soja. Primary Lead 
and Zinc Availability— Market Economy Countries. A Minerals 
Availability Appraisal. BuMines IC 9026, 1985, 44 pp. 

11. Mining Magazine. Polish Copper. V. 145, No. 11, 1977, pp. 
500-506. 

12. Engineering and Mining Journal. Massive Development 
Plans Herald Poland's Entry Into World Copper Market. V. 178, 
No. 2, 1977, pp. 27-31. 



28 



APPENDIX A.— CENTRALLY PLANNED ECONOMY COUNTRIES 



Mine production of silver in centrally planned economy 
countries (CPEC's) for the years 1972 and 1983 is shown 
in table A-1. In 1972, eight CPEC countries were estimated 
to have produced 52.8 million tr oz Ag, or about 17.7 pet 
of total world mine production of 298.1 million tr oz. The 
Soviet Union, the CJerman Democratic Republic, and 

Poland, with 40.0, 5.0 and 4.0 million tr oz, respectively, 
accounted for 92.8 pet of the CPEC production. Twelve years 
later, in 1983, estimated production from these eight CPEC 
countries w£is 80.6 million tr oz Ag, or about 20.5 pet of total 
world mine production of 390.6 million tr oz. For 1983, the 
Soviet Union, Poland, and China, with 47.2, 24.9 and 2.5 
million tr oz, respectively, were responsible for 92.6 pet of 
the CPEC silver production. 

The previous discussion raises four important points 
concerning CPEC mine production of silver. First, about 30 
pet of the increase in total world mine silver production from 
1972 through 1983 came from CPEC's. Second, the Soviet 
Union's increase of annual production level has been 
relatively small, with production in 1983 only 18 pet higher 
than in 1972. Third, Poland has increased its annual silver 
output dramatically, from 4.0 million tr oz in 1972 to 24.9 
million tr oz in 1983, accounting for 75 pet of the total in- 
crease in annual CPEC silver production over that period. 
Fourth, China, although showing a 212.5-pct increase in 
annual silver output over the 12-yr period, is still a fairly 
insignificant factor in the world's silver mining industry, 
with estimated annual production of only 2.5 million tr oz 
as of 1983. 

Essentially, a discussion of CPEC mine production of 
silver as of the early- to mid-1980's is limited to the Soviet 
Union, ranked third in world production, and Poland, 
ranked seventh, as of 1983. 

Throughout the 20th century, mine production of silver 
in the Soviet Union has been almost completely as a 
byproduct of the treatment of predominantly copper, 
predominantly lead-zinc, predominantly gold, and since the 
1940's, predominantly nickel-copper ores. 

In 1938, at the onset of World War II, silver production 
in the Soviet Union was estimated to be 8.04 million tr oz, 
with 70 pet coming from lead-zinc ores, 22.5 pet from cop- 
per ores, and 7.5 pet from gold ores. For 1983 (46 yr later), 
total Soviet silver production had increased to a level of 47.2 
million tr oz/yr. The Bureau estimates that, as of 1983, lead- 
zinc and copper ores still account for the vast majority (85 
pet) of the Soviet Union's mine production of silver, with 
approximately equal contributions from each type of ore. 
The Bureau also estimates that, as of 1983, the nickel- 
copper sulfide ores of the Norilsk Complex in the Urals and 
the Pechenga-Monchegorsk areas of the Kola Peninsula 
were contributing around 12.5 pet of the total mine produc- 
tion of silver, while the predominantly gold ores only con- 
tributed about 2.5 pet of the total. Estimates of mine pro- 
duction of silver, copper, lead, zinc, and nickel in the Soviet 
Union for the 1936-38 period and for the years 1972 and 
1983 are presented in table A-2. 

The scope of this study prohibits any assessment of 
demonstrated resources, economies, or total availability of 
silver, but this section can provide a perspective by which 
silver production in the Soviet Union can be compared with 
that of the MEC's. 

Toward that end, the following brief comments are 
presented: 



Table A-1.— Mine production of silver in centrally planned 
economy countries, 1972 and 1983 

(Thousand troy ounces) 

Country 1972 1983 

Bulgaria NA 930 

Czechoslovakia 1 ,250 1 ,300 

German Democratic Republic 5,000 1 ,450 

Hungary 42 NA 

Korea, North 700 1 ,600 

China 800 2,500 

Poland 4,000 24,900 

Romania 1 ,000 900 

U.S.S.R 40,000 47,200 

Total 52,792 80,780 

NA Not available. 

Table A-2.— Production of copper, lead, nickel, silver, and zinc 
in the Soviet Union for selected years 



Commodity 


1936-381 


1972 


1983 


Copper ...10^ mt. . 


115 


733 


1,000 


Lead 10^ mt. . 


58.3 


510 


435 


Nickel 103 mt. . 


Negligible 


140 


204 


Silver . . 1 03 tr oz . . 


8,038 


40,000 


47,200 


Zinc 103 mt. . 


63.7 


717 


805 



^Source: Confidential document. 



Table A-3.— Production of copper, lead, silver, and zinc In Poland, 
1962, 1972, and 1983 



Commodity 



1962 



1972 



1983 



Copper .... mt . . 26,608 

Lead mt. . 44,100 

Silver tr oz. . 128,600 

Zinc mt. . 159,961 



135,000 


380,000 


68.000 


58,600 


14,000,000 


124,900.000 


195,000 


146.000 



iMlne ouput, recoverable. 



1. Resources of predominantly copper, nickel-copper, 
and gold ores containing silver are believed to be Isirge 
relative to those of most MEC countries, while Soviet lead- 
zinc ores are probably less abundant. 

2. Nearly all of the silver production in the Soviet 
Union comes from the production of other primary com- 
modities. This could be one of the reasons that the level of 
annual production in the Soviet Union has only increased 
18 pet from 1972 through 1983. 

3. It appears that, in the existing silver mining industry 
in the Soviet Union, any major increase in silver produc- 
tion would likely have to result from increased output of 
copper, nickel, lead, and zinc. 

As mentioned previously, mine production of silver in 
Poland increased dramatically from only 4 million oz in 
1972 to 24.9 million tr oz in 1983. This increase represented 
not only 75 pet of the increase in annual CPEC silver out- 
put from 1972 through 1983 but also 22.6 pet of the entire 
world's increase over the same period. 

Nearly all of Poland's silver production comes from the 
mining of copper ores of the Zechstein sedimentary forma- 
tions of Permian Age, which underlie a very large areal ex- 
tent of western Poland and comprise a very large copper 
resource. The first mines to extract and treat Zechstein cop- 
per ores began development in 1961 {11); there has been 
a large and rapid increase in capacity over the past 20 yr. 

For example, in 1968 only about 2.8 million mt ore was 
mined and treated from Zechstein deposits; however, by 
mid- to late-1979 the total installed capacity for mines ex- 
tracting and treating these ores was 41.0 million mt/yr, with 
further expansions planned. 



29 



It is interesting to note that since the in situ Zechstein 
copper ores grade from 30 to 50 g/mt Ag (12), 41 million 
mt ore would contain 40 to 65 million tr oz Ag, and 
recoveries of 50 to 60 pet would result in silver production 
from these copper ores of from 20 to 40 million tr oz/yr. 

Table A-3 presents data on Poland's production of cop- 
per, silver, zinc, and lead for the years 1962 (prior to the 
major development of the Zechstein ores), 1972, and 1983. 



The data show the tremendous increase in both copper and 
silver production resulting from development of the Zech- 
stein ores. The lead and zinc production values for these 
years have also been included to illustrate that there has 
been very little change in Polish production of these com- 
modities from 1962 through 1983 and, most likely, for 
byproduct silver output resulting from production of these 
commodities. 



30 



APPENDIX B.— EVALUATED PROPERTIES LISTED BY PRIMARY COMMODITY 



Table B-1 .—Properties evaluated as predominantly silver operations 

(Ownership and production status as of January 1984) 



Location and 
property name 



Owner 



Mine 
type! 



Status^ 



United States: 

Alaska: Golden Zone 

Arizona: Silver-Eureka District 

Colorado: 

Bulldog Mine 

Revenue-Virginius 

Idaho: 

Clayton Silver Mine 

Crescent Mine 

Delamar 

Galena 

Lucky Friday Mine 

Sunshine 

Maine: Big Hill 

Montana: 

Black Pine 

Butte District Zinc 

Flat Head 

Troy 

Nevada: 

Candelaria 

Sixteen-to-one 

Taylor Silver Mine 

Ward Mountain 

New Mexico: St. Cloud Mine 

Utah: 

Escalante 

Trixle Mine 

Canada: 

Abcourt-Barvue 

Agnico-Eagle (Silver Division) 

Beaverdell 

Detour Project 

Coldstream 

Silverfields (Teck) 

Terra 

United Keno Hill 

Finland: 

Pyhasalmi 

Vihanti 

France: L'Argentiere 

Italy: Funtana Raminosa 

Mexico: 

Angangueo 

Avino 

Huautia 

La Colorada 

La Negra 

Lampazos 

Las Torres 

Parral Unit 

Real de Angeles 

Real del Monte y Pachuca 

San Geronimo 

Santa Maria de La Paz 

Tayoltlta 

Tocayos 

Morocco: 

Bougaffer 

Imiter 

Zgounder 

Peru: 

Alpamarca 

Areata 

Berenguela 

Caylloma 

Julcani 

Morococha 

Orcopampa 

Quiruviica 

San Genaro 

Sayapullo 

Ucnucchucua 

Republic of South Africa: Black Mountain 
Spain: 

Aznalcollar 

Cartagena 

Sweden: Vassbo-Guttusjo 



Enserch Exploration, Inc 

Orbey Minerals-New Jersey Zinc . 

Homestake Mining Co 

Revenue-Virginius Mines Co 



Clayton Silver Mines 

Bunker Hill Ltd 

Mapco Minerals-Superior Oil 
Callahan-Hecia Mining Co. . 

Hecia Mining Co 

Sunshine Mining Co 

Scintilore Explorations Ltd. . 



Inspiration Consolidated Copper Co. 

Anaconda Copper (ARCO) 

Coca Mines 

ASARCO 



Nerco Minerals-Coca Mines 

Sunshine Mining Co.-MidContinent . . 
Silver King Mines-Agnew Enterprises 

Gulf Oil-Silver King Mines 

St. Cloud Mining Co 



Ranchers Exploration and Development . 
Sunshine Mining Co 



Abcourt Silver Mines-Noranda Mines Ltd 

Agnico-Eagle Mines Ltd 

Teck Corp 

Seico Mining Corp. Ltd 

Noranda Mines Ltd 

Teck Corp 

Various owners 

United Keno Hill Mines Ltd.-Falconbridge Ltd. 

Outokumpu Oy 

..do 

Penarroya 

SAMIM 



Impulsora Minera de Angangueo. 
Cia. Minera Mexicana de Avino . . 
Rosario Mexico S. A. de C.V. . . . 

Minera Victoria Eugenia 

Industrias Penoles S. A. de C.V. . 
Minera Lampazos S. A. de C.V. . 

Cia. Minera Las Torres 

Industrial Minera Mexico S. A. . . 

Minera Real de Angeles 

Cia. Real del Monte y Pachuca . . 

Industrias Luismin 

Minera Santa Maria de La Paz . . 

Industrias Luismin 

Minera Victoria Eugenia 



SODECAT (100% BRPM) 
Societe Miniere Imiter . . . 
BGPM-ARMICO 



Sindicato Minero Rio Pallanga 

Minas de Areata S. A 

Minero Peru 

Compania Minera de Caylloma 

Cia. de Minas Buenaventura S. A 

CENTROMIN 

Cia. de Minas Buenaventura S. A 

Corporacion Minera Nor-Peru 

Cia. Minera Castrovirreyna S. A 

Cia. Minera Sayapullo S. A 

Cia. de Minas Buenaventura S. A 

Phelps Dodge-Gold Fields of South Africa 



Socledad Andaluza de Piritas 

Penarroya 

Boliden Metall AB 



U 


N 


S 


N 


u 


P 


u 


N 


u 


p 


u 


P 


s 


p 


u 


p 


u 


p 


u 


p 


s 


N 


u 


p 


u 


N 


s 


N 


u 


p 


s 


p 


u 


p 


s 


p 


u 


N 


u 


P 


u 


p 


u 


N 


u 


N 


u 


P 


u 


P 


s 


P 


C 


N 


u 


P 


u 


P 


c 


P 


u 


P 


u 


P 


u 


N 


u 


P 


u 


P 


c 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


s 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


c 


P 


u 


P 


u 


P 


s 


P 


u 


P 


s 


N 


c 


P 


c 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


N 


s 


P 


s 


P 


u 


P 



'U = Underground; S = Surface; C = Combined. 



*P = Producer; N = Nonproducer. 



31 



Table B-2.— Properties evaluated as predominantly zinc operations 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type' 



Status^ 



United States: 
Alasl<a: 

Arctic Camp 

Greens Creek 

Lik 

Red Dog 

Colorado: 

Black Cloud (Leadville Unit) 

Idarado 

Sunnyside 

Idaho: 

Bunker Hill 

Star-Morning 

Nevada: Ruby Hill Mine 

New York: Balmat 

Wisconsin: Crandon 



Kennecott Minerals (SOHIO) 
Noranda Mines Ltd.-others . . 
Houston Oil and Minerals . . 
NANA-Cominco 



ASARCO-Resurrection 
Newmont Mining Corp. 
Standard Metals Corp. 



Algeria: El Abed . . . . 
Argentina: El Aguilar 



Bunker Hill Ltd.-Gulf Resources . 
Bunker Hill Ltd.-Hecia Mining Co. 

Ruby Hill-Hecla-others 

St. Joe Minerals Corp 

Exxon Minerals Corp 



SONAREM 

St. Joe Minerals Corp. 



CRA Ltd 

EZ Industries Ltd 

Mount Isa Mines (MIM) Ltd 

Triako Mines-MIM Holdings Ltd. 



Australia: 

Dugald River 

Elura 

Hilton 

Lady Loretta 

McArthur River MIM Holdings Ltd 

Mount Isa MIM Ltd 

New Broken Hill CRA Ltd 

Que River Aberfoyle Ltd.-Paringa Mining . 

Rosebery-Hercules EZ Industries Ltd 

Teutonic Bore Seltrust-MIM Ltd 

Woodlawn St. Joe-Phelps Dodge-CRA Ltd 

Zinc Corporation Mine Zinc Corp Ltd 



Bolivia: 

Matilde . . . 
Quechisia . 



COMIBOL 
..do 



Burma: Bawdwin No. 1 Mining Corp 

Canada: 

Anvil Range Cyprus Anvil Mining Corp 

Brunswick No. 12 Brunswick Mining and Milling 

Buttle Lake Westmin Resources Ltd.-Brascan Ltd. 

Caribou Mine Anaconda Canada Ltd 

Chisel Lake Hudson Bay Mining and Smelting ... 

Cirque Cyprus Anvil-Hudson Bay 



Noranda Mines Ltd. 

Noranda-MacDonald 

Canada Wide Mines Ltd 

Barrier Reef Resources Ltd. . . 
Bathurst Norsemines-Cominco . 



F Group 

Gallen 

Gays River . . . 
Goz Creek . . . 
Hackett River . 

Half Mile Lake Texasgulf Inc. 

Heath Steele (Little River JV) Heath Steele-Noranda-ASARCO 

Howard's Pass Placer Dev.-U.S. Steel Corp. . . . 

King Fissure Internal. Standard Resources . . 

Lyon Lake Noranda Mines Ltd 

Mattabi Noranda-Abitibi Mines Ltd 

Mattagami Lake Noranda Mines Ltd 

Mel St. Joe-Sovereign Metals 

Nanisivik Mineral Resource International . 

Polaris Cominco 

Prairie Creek Cadillac-Procan Explorations . . . 

Restigouche Placer Development 

Robb Lake Texasgulf-Arrow Int./AmBar 

Sullivan Cominco 

Tom Hudson Bay Mining & Smelting . 

France: 

Bodennec BRGM 

Malines Penarroya 

Porte-Aux-Moines BRGM 

Saint Saivy Penarroya 



Germany, Federal Republic of: 

Grund Preussag AG Metall. 

Rammelsberg do 



Greece: 

Mavres Petres-Madem Lakes 
Olympias 



Hellenic Chemical Products Co. 
..do 



Greenland: Black Angel Cominco 

Honduras: El Mochito Rosario Resources (AMAX) 



S 


N 


U 


N 


s 


N 


s 


N 


u 


P 


u 


N 


U 


P 


u 


N 


u 


P 


u 


N 


u 


P 


u 


N 


u 


P 


u 


P 


u 


N 


u 


N 


u 


N 


u 


N 


c 


N 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


S 


P 


u 


P 


u 


P 


u 


P 






P 


u 


P 


u 


p 


u 


N 


u 


p 


u 


N 


8 


N 


S 


P 


U 


N 


S 


N 


U 


N 


U 


N 


u 


P 


u 


N 


u 


N 


u 


P 


u 


P 


u 


P 


u 


N 


u 


P 


u 


N 


u 


N 


S 


N 


u 


N 


u 


P 


u 


N 


s 


N 


u 


P 


u 


N 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 


u 


P 



32 



Table B-2.— Properties evaluated as predominantly zinc operations— Continued 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type' 



Status^ 



India; 



Mochia-Balaria . . 
Rajpura-Dariba . . 
Zawarmala-Baroi 



Hindustan Zinc, 

..do 

..do 



Ltd. 



Ireland: Tara (Navan) Tara Exp.-Government of Ireland 

Italy: Montevecchio SAMIM 



Japan: 

Ezuri 

Ful(£izawa 

Hosokura 

Kamlol<a (Mozumi) 

Kamloka (Tochibora) 

Kosaka Dowa Mining Co. Ltd 

Nakatatsu Nippon Zinc Mining Co. Ltd. 

Toyoha Toyaha Mining Co. Ltd 



Dowa Mining Co. Ltd 

..do 

Mitsubishi Metal Corp 

Mitsui Mining and Smelting 
..do 



Mexico: 

Charcas 

Cuale 

El Monte-El Carrizal . . 

El Orito 

El Tecolote 

Fresnillo 

Gochico 

Naica 

Rey de La Plata 

San Francisco del Oro 

San Jose 

San Martin 

Santa Barbara 

Santa Eulaiia 

Taxco 

Velardena 

Zimapan-Carrizal 



Industrial Minera Mexico S. A. . . 

Cia. Fresnillo S. A 

..do 

Cia. Minera Real de Asientos . . . 
Industrial Minera Mexico S. A. . . 

Cia. Fresnillo S. A 

Industrias Penoles S. A. de C. V. 

Cia. Fresnillo S. A 

Industrias Penoles S. A. de C. V 

Frisco S. A. de C. V 

Zimapan Mexico S. A 

Industrial Minera Mexico S. A. . . 

...do 

...do 

...do 

...do 

Industrias Penoles-AMAX 



Morocco: Bou Madine 
Namibia: Rosh Pinah . 



Government of Morocco . 
Imcor Zinc (Pty.) Ltd. . . . 



Peru: 



Atacocha Cia. Minera Atacocha S. A. . . . 

Carahuacra Volcan Mines Co 

Carhuacayan Sindicato Minero Rio Pallanga . 

Casapaica CENTROMIN . 



Caudolosa Grande 
Cerro de Pasco 
Coiquijirca .... 

Hercules 

Huachocolpa . . 

Huaron 

Madrigal 

Milpo Cia. Minera Miipo S. A 

Raura Cia. Minera Raura S.A, 

San Cristobal St. Joe Minerals Corp. 

Santander CENTROMIN 

Yauricocha CENTROMIN 



Cia. Minera Castrovirreyna S. A. . . 

CENTROMIN 

Sociedad Minera El Brocal S. A. . . 

Cia. Minera Alianza S. A 

Cia. de Minas Buenaventura S. A. 

Cia. Minera Huaron S.A 

Homestake Mining Co 



Portugal: Aljustrel Empresa Minera D'Aijustrel 

Republic of South Africa: Gamsberg Gamsberg Zinc Corp 

Spain: 

Rubiales EXMINESA 

Sotiel Minas de Almagresa S. A. . 



Sweden: 

Garpengerg 
ZInkgruven . 



Boliden Metall AB 

Soc. des Mines et Fonderles . 



Zaire: Kipushi Gecamines 

Zambia: Broken Hill Nchanga Consolidated 



u 


p 


u 


N 


u 


N 


u 


p 


u 


N 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


s 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


N 


u 


p 


u 


p 


c 


p 


u 


p 


u 


p 


u 


p 


c 


p 


c 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


c 


p 


u 


p 


u 


p 


u 


p 


u 


N 


u 


p 


u 


N 


u 


P 


u 


P 


u 


P 


u 


P 



'U = Underground; S = Surface; C = Combined. 
2P = Producer; N = Nonproducer. 



33 



Table B-3. — Properties evaluated as predominantly lead operations 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type' 



Status2 



United States: 
Missouri: 

Bushy Creek Division 

Buictt 

Fletcher Division 

Franl< R. Miliiken 

Indian Creek 

Magmont 

Viburnum No. 28 and No. 29 

West Fork 

Utah: Ontario Mine 



St. Joe Minerals Corp 

AMAX Lead-Homestake Lead 

St. Joe Minerals Corp 

Kennecott (Ozark Lead Co.) . . 

St. Joe Minerals Corp 

Cominco American-Dresser . . 

St. Joe Minerals Corp 

ASARCO 

United Park City-Noranda . . . 



Australia: North Broken Hill 



Mexico: 

La Encantada. 
Rosario 



North Broken Hill Ltd. 



La Encantada S.A 

Industrial Minera Mexico S.A. 



Morocco: 

Aouli-Mibladen 
Djebel Aouam 
Sidi Lachen . . 

Touissit 

Zeida 



Penarroya 

BRPM-Royal Asturienne-Vielle . 

BRPM-ARMICO 

Royal Asturienne des Mines 
SODIM-ZELLIDJA-BRPM 



Tsumeb Corp. Ltd. 



I 



Namibia: Tsumeb 

Republic of South Africa: Broken Hill Phelps Dodge-Gold Fields of South Africa 

Spain: Linares (El Cobre) Cia. Minera la Cruz 

Sweden: Laisvall Boliden Metall AB 



U 


p 


U 


P 


U 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


N 


u 


N 



u 


p 


u 


N 


u 


P 


u 


P 


u 


N 


u 


P 


S 


P 


u 


P 


u 


P 


u 


P 


u 


P 



1U 

2p 



Underground; S = Surface; C = Combined. 
Producer; N = Nonproducer. 



Table B-4.— Properties evaluated as predominantly copper operations 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type' 



Status^ 



United States: 
Arizona: 

Bagdad 

Christmas 

Helvetia East 

Inspiration 

Lakeshore 

Magma (Superior) 

Metcalf 

Mineral Park 

Mission-San Xavier 

Morenci 

New Cornelia 

Oracle Ridge 

Peacock 

Pima Pit 

San Manuel-Kalameizoo . . 

Sierrita 

Silver Bell 

Twin Buttes 

California: 

Lights Creek 

Walker 

Michigan: 

Presque Isle Syncline . . . 

White Pine 

Montana: 

Butte Copper 

Heddleston 

Nevada: 

New Ruth 

Victoria 

New Mexico: 

Chino 

Continental Surface 

Continental Underground . 

Copper Flat 

Tyrone 

Utah: Bingham 

Washington: Sunrise 

Wisconsin: Flambeau 



Cyprus Mines (AMOCO Metals Co.) 
Inspiration Consolidated Copper Co. 

Anamax Mining Co 

Inspiration Consolidated Copper Co. 

Noranda Mines Ltd 

Magma Copper Corp 

Phelps Dodge Corp 

Duval Corp. (Pennzoil) 

ASARCO 

Phelps Dodge Corp 

..do 

Continental Copper Co. (Union Oil) . 

Producers Mineral Corp 

Cyprus Mines (AMOCO Metals Co.) 

Magma Copper Corp 

Duval Sierrita (Pennzoil) 

ASARCO 

Anamcix Mining Co 



Placer Amex, Inc. 
Calicopia Corp. . . 



AMAX 

Copper Range Co. 



Anaconda Copper (ARCO) . 
..do 



Kennecott Minerals (SOHIO) 
Day Mines Inc 



Kennecott Minerals (SOHIO) 

U.V. Industries Inc 

..do 



Argentina: 

Bajo La Alumbrera 
El Pachon 



Quintana Minerals Corp.-Philbro Mineral Enterprises 

Phelps Dodge Corp 

Kennecott Minerals (SOHIO) 

International Brenmac Dev. Corp 

Flambeau Minerals Corp. (Kennecott) 



Yacimlentos Agua del Dionlsio 
Cia. Minera Aguilar S.A 



34 



Table B-4.— Properties evaluated as predominantly copper operations— Continued 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type' 



Status^ 



Australia; 

Benambra. . 

C.S.A 

Cadia 

Kanmantoo . 
Mount Lyeil 

Brazil: Caraiba . 



Western Mining-British Petroleum . . . 

CRA Ltd 

Pacific Copper Ltd.-Estel NV Hoesch 

CRA Ltd 

Mount Lyell Mining and Railway .... 



Caralbas Metais S.A. 



Canada: 

Afton 

Bell 

Bethlehem-JA Zone 

Brenda 

Copper Mtn.-Needle Mtn. 

Copper Rand 

Fox 

Galore Creek 

Geco 

Granduc 

Granisle 

Great Lakes Nickel 

Huckleberry Mtn 

Island Copper 

Izok Lake 

Kidd Creek 

Lake Dufault Division . . . 

Lornex 

Opemiska Division 

Ruttan 

Sam Goosly 

Shaft Creek 

Similkameen 

Thierry 



Teck Corp.-lso Mines Ltd 

Noranda Mines Ltd 

Bethlehem Copper Ltd 

Brenda Mines-Noranda Mines Ltd. 
Mines Gaspe-Noranda Mines Ltd. . 

Patino Mines 

Sherritt Gordon Mines Ltd 

Stikine Copper Ltd 

Noranda Mines Ltd 

Granduc Mines-Esso Resources . . 

Noranda Mines Ltd 

Boliden Canada Ltd 

Kennco Explorations Ltd 

Utah Mines Ltd 

Texasgulf Inc 

. . do 

Falconbridge Copper Ltd 

Lornex Mining Corp. Ltd 

Falconbridge Copper Ltd 

Sherritt Gordon Mines Ltd 

Equity Mining-Placer Development 
Teck Corp.-Liard Copper Mines. . . 

Newmont Mining Corp 

Union Miniere S.A 



Chile: 

Chuquicamata . . 
El Salvador . . . , 

Escondida 

Los Pelambres . 
Mantos Blancos 



Finland: Keretti . . . . 
Indonesia: Ertsberg. 
Malaysia: Mamut . . . 



Mexico: 

Arroyos Azules . 

Cananea 

El Arco 

Santo Tomas . . 



CODELCO-Chile 

. . do 

Utah International-Getty Oil 

Anaconda Copper (ARCO) 

Empresas Sudamericana Consolidated 

Outokumpu Oy 

Freeport Indonesia Inc 

Overseas Mineral Resource Development 



Comision de Fomento Minero .... 

Industrial Minera Mexico S.A 

Industrial Minera Mexico-ASARCO 
Industrias Penoles S.A. de C.V. . . 



Morocco: El Bleida 



Namibia: 

Klein Aub 
Otjihase . 



Societe Miniere de Bou Gaffer 



Klein Aub Kopermaatskappy Beperk . 
Tsumeb Corp. Ltd.-Otjihase Ltd 



Norway: Tverrfjellet 

Panama: Cerro Colorado 

Papua New Guinea: 

Bougainville 

Ok Tedi 

Yandera 



Folldal Verk A/S 

Empresa de Cobre Cerro Colorado S.A. 



PNG Govt.-CRA-Public-Panguna 

PNG Govt.-Metallgesellschaft-BHP-AMOCO Metals Co. 
Triaco-Buka-Broken Hill 



Peru: 



Antamina . . 
Cobriza . . . . 
El Aguila. . . 
Michiquillay 
Quellaveco . 
Toromocho . 



Minero Peru 

CENTROMIN 

Empresa Minera El Aguila 

Minero Peru-Michiquillay Copper Corp. 

Minero Peru 

CENTROMIN 



Philippines: 

Amacan (North Davao) 

Basay 

Batong-Buhay 

Black Mountain 

Boneng-Lobo 

Carm'jn (Atlas) 

Dizon 

Lepanto 

Mapula-Masara 

Sabena 

San Antonio 



North Davao Mining Corp 

Basay Mining Corp 

Development Bank of Philippines 

Benguet Exploration, Inc 

Western Minoico Corp 

Atlas Consolidated Mining and Development Corp. 

Benguet Consolidated Ltd 

Lepanto Consolidated Mining Co., Inc 

Apex Mining Co 

Sabena Mining Corp 

Philippine Government 



u 


N 


u 


P 


s 


N 


U 


N 


U 


P 



S 


p 


S 


p 


S 


p 


s 


p 


u 


p 


u 


p 


u 


p 


s 


N 


u 


p 


u 


N 


s 


p 


u 


N 


s 


N 


s 


P 


s 


N 


u 


P 


u 


P 


s 


P 


u 


P 


u 


P 


s 


P 


s 


N 


s 


P 


u 


P 


s 


P 


u 


P 


s 


N 


s 


N 


s 


P 



U 


N 


S 


P 


s 


N 


s 


N 



35 



Table B-4. — Properties evaluated as predominantly copper operations — Continued 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type^ 



Status^ 



Santo Nino . . 
Santo Tomas 

Sipalay 

Tapian 

Taysan 



Portugal: Neves-Corvo 

Republic of South Africa: O'Okiep 



Spain: 

Cerro Colorado 
Santiago 



Sweden: 

Altik 

Stekenjokk 



Turkey: 

Ergani-Madeni 
Murgul 



Yugoslavia: 

Bor 

Majdanpek . 
Veliki Krivelj 



Zimbabwe: Mangula (Miriam) . 



Baguio Gold Mining Co., Inc. 

Philex Mining Corp 

Maricalum Mining Corp 

Philippine Government 

Benguet Consolidated Ltd. . . 



Emma-BRGM and Penarroya. 
O'Okiep Copper Co. Ltd 



Rio Tinto Patino S.A. 
. .do 



Boliden Metall AB . 
..do 



Etibank 

Etibank-Black Sea Copper Works 



RTB Bor 
..do... 
. . do . . . . 



MTD (Mangula) Ltd. 



u 


P 


u 


P 


8 


P 


S 


P 


S 


N 



1U 

2p 



Underground; S = Surface; = Combined. 
Producer; N = Nonproducer. 



Table B-5.— Properties evaluated as predominantly gold operations 

(Ownership and production status as of January 1984) 



Location and 
property name 



Owner 



Mine 
type^ 



Status^ 



United States: 
California: 

McLaughlin 

Yuba Placer Operations . . . 

Colorado: Victor Project 

Idaho: West End-Garnet Creek . 
Montana: 

Golden Sunlight 

Zortman-Landusky 

Nevada: 

Alligator Ridge 

Battle Mountain 

Borealis 

Carlin Operations 

Jerritt Canyon 

Round Mountain 

Windfall 

New Mexico: Ortiz 

South Dakota: Homestake . . . . 
Utah: Mercur 



Homestake Mining Co 

Placer Service Co.-Yuba Natural Resources Co. 

Silver State Mining Corp 

Superior Oil Co.-TRV Minerals Corp 



Placer Amex, Inc 

Pegasus-Wharf Resources-Gold Reserve Corp. 



Occidental Minerals-Amseico 

Duval Corp. (Pennzoil) 

Houston International Minnerals Corp 

Newmont Mining Corp 

Freeport Gold Co.-FMC Gold Inc 

Louisiana Land-Homestake-Case Pomeroy and Co. 

Western-Windfall Inc 

Gold Fields Mining Corp 

Homestake Mining Co 

Getty Mining Co. -Gold Standard 



Australia: 

Central Norseman .... 

Fimiston Leases 

Hill 50-Morning Star . . 
Mount Morgan Tailings 
Mt. Charlotte/Fimiston . 

North Kalgurii 

Telfer 



Western Mining Corp. Ltd.-Private individuals . . 

Kalgoorlie Mining Associates 

Hill 50-Western Mining Corp 

Peko Wallsend Ltd 

Kalgoorlie Mining Associates 

North Kalgurii Mines and Metals Ltd 

Newmont Holdings (Prop.) Ltd.-Dampier Mining. 



Bolivia: Teoponti Compania Minora Del Sur S. A. 



Brazil: 

Cerra Pelada 
Morro Velho . 



CVRD 

Bozzano-Simonsen-Anglo American 



Canada: 

Agnico-Eagle (Gold Division) . . . 

Camflo-Malarctic Hygrade 

Campbell Red Lake 

Con-Rycon 

Detour Lake 

Dickenson 

Dome 

Giant Yellowknife 

Golden Giant (Hemic) 

Kerr Addison 

LAC Minerals Property (Hemlo) 



Agnico-Eagle Mines Ltd 

Camflo Mines Ltd 

Campbell Red Lake Mines Ltd.-Dome Mines Ltd. 

Cominco 

Various owners 

Dickenson Mines Ltd 

Dome Mines Ltd 

Giant Yellowknife Mines Ltd 

Norada-Goliath-Golden Sceptre 

Kerr Addison Mines Ltd 

LAC Minerals Ltd 



S 


N 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


N 



36 



Table B-5.— Properties evaluated as predominantly gold operations 

(Ownership and production status as of January 1982) 



Location and 
property name 



Owner 



Mine 
type' 



Status^ 



Ladner Creel< 

Lupin Project 

Macassa (Willroy) . . . 
Pamour Porcupine . . . 

Sigma 

Teck-Corona (Hemlo) . 

Chile: El Indio 



Carolin Mines Ltd.-Aquarius Group 

Echo Bay Mines Ltd 

Willroy Mines Ltd 

Pamour Porcupine Mines Ltd.-Noranda Mines Ltd. 

Sigma Mines-Dome Mines Ltd 

Intl. Corona-Teck Corp 



u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


N 



St. Joe Minerals Corp. -Private investors . 



Colombia: 

El Bagre Mineros de Antioquia S. A 

La Salada SINDICO (Colombian Government) 



Dominican Republic: Pueblo Viejo 



Ghana: 

Ashanti . 
Prestea . 
Tarkwa . 



Rosario Dominicana S. A. 



Ghana Goverment-Lonrho Ltd 

State Gold Miine Corp. (Ghana Government) . 
...do 



Philippines: 

Benguet Gold Operations 

Masbate 

Paracale 



Republic of South Africa: 

Beatrix 

BIyvooruitzicht 

Bracken 

Buffelsfontein 

Consolidated Modderfontein 

Deelkraal 

Doornfontein 

Dreifontein Consolidated 

Durban Roodepoort Deep 

E. T. Consolidated 

East Rand Proprietary Mine 

Egoli Consolidated (East Rand) . . 
Egoli Consolidated (West Rand) . . 

Elandsrand 

ERGO (East Rand AU and U Co.) 
Fairview (Barberton) 



Gencor 

Barlow Rand 

Gencor 

...do 

Consolidated Modderfontein Mines Ltd. . . . 

Gold Fields of South Africa 

...do 

Dreifontein Consolidated Mines Ltd 

Barlow Rand 

Eastern Transvaal Consolidated Mines Ltd. 

East Rand Proprietary Mines Ltd 

Egoli Consolidated Mines Ltd 

...do 

Anglo American Corp 

...do 

Gencor 



Free State Geduld Anglo American Corp. 

Grootvlei 

Harmony 

Hartebeestfontein .... 

Kinross 

Kloof 

Leslie 

Libanon 

Loraine (Allanridge) . . . 

Marievale 

President Brand 

President Steyn-Video . 
Randfontein Estates . . 
RMMM Slimes Project . 



Gencor. 

Barlow Rand 

Anglo-Transvaal Consolidated Mines Ltd. 

Gencor 

Gold Fields of South Africa 

Gencor 

Gold Fields of South Africa 

Anglo-Transvaal Consolidated Mines Ltd. 

Gencor 

Anglo American Corp 

... do 

Johannesburg Consolidated Mines Ltd. . 
Rand Mines Mining and Milling Corp. . . . 



Slimmer and Jack Anglo American Corp. 

St. Helena 

Stilfontein 

Unisel 

Vaal Reefs 

Venterspost 

Village Main Reef 

West Rand Consolidated 

Western Areas 

Western Holdings Complex 

Winkelhaak 

Witwatersrand Nigel 



Gencor . 
Gencor . 

Union Corp 

Vaal Reefs Exploration-South Vaal Holdings 

Gold Fields of South Africa 

Village Main Reef Gold Mining Corp 

Gencor 

Johannesburg Consolidated Mines Ltd 

Anglo American Corp 

Gencor 

African Exploration 



Taiwan: Chin-Qua-Shih . . 

Zimbabwe: 

Arcturus 

Athens 

Blanket 

Dalny 

How 

Mazoe 

Muriel 

Old West-Redwing . . 
Patchway-Brompton . 

Renco 

Shamva 

Venice 



Taiwan Metal Mining Corp. 



Lonrho Zimbabwe Ltd 

... do 

Falconbridge Nickel Mines Ltd. 

Falcon Mines Ltd 

Lonrho Zimbabwe Ltd 

...do 

...do 

.. do 

Rio Tinto (Zimbabwe) Ltd 

. . do 

Lonrho Zimbabwe Ltd 

Falcon Mines Ltd 



'U = Underground; 8 = Surface; C = Combined. 
2P = Producer; N = Nonproducer. 



Benguet Corp 

Atlas Consolidated Mining and Development Corp. 
Philippine Eagle Mines Inc 



u 


p 


u 


p 


u 


p 


u 


p 


S 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


u 


p 


s 


p 


S 


p 


u 


p 


S 


p 


u 


p 


u 


p 


u 


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p 


u 


p 


u 


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u 


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u 


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u 


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u 


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s 


p 


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p 


u 


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u 


p 


u 


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u 


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s 


p 


u 


p 


u 


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u 


p 


u 


p 


u 


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*U.S. Government I'rintinR Office 



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78 . 


1986 - 166 


-485/50944 







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